Mortgage debt growth is slowing, but households are increasingly tapping their credit cards, keeping overall household debt growth stable in April, according to new data from Statistics Canada.
The national statistical agency reported that total household credit liabilities were up by 0.2% in the month to reach $2.85 trillion. The debt growth rate was in line with the rate recorded in March.
While mortgage debt was up 0.2% in April, StatsCan reported that, on an annualized basis, household mortgage debt grew at its slowest pace since 2018, climbing just 2.6%.
The increase in mortgage debt came against the backdrop of existing home sales rising for the third straight month, as both sales volumes and average sale prices increased.
“With the policy interest rate increasing to 4.75% in June, debt pressures are likely to increase in the coming months,” StatsCan said.
The agency also reported that non-mortgage debt grew by 0.3% in April. On an annualized basis, non-mortgage borrowing rose at a 3.8% rate in April, up sharply from 1.3% in March.
In particular, credit card debt grew by 1.5% in April, an increase from its 0.6% growth rate in March.
StatsCan also reported that outstanding balances on home equity lines of credit remained stable in April, following a 0.3% decrease in March.