Canadian household debt soared to a record high in the second quarter, as rock bottom interest rates continued to encourage heavy borrowing.
The ratio of debt to disposable income rose to 167.6 per cent in the three months to June, topping the first quarter’s 165.3 per cent and eclipsing last year’s record, according to Statistics Canada’s national balance sheet report released on Thursday.
As a collection agency operating in Edmonton, Calgary and the greater GTA we recognize that the vast majority of consumers we inevitably end up dealing with are good people, with good intentions that have now simply arrived at the tipping point of having to either try to continue to rob Peter to pay Paul or, in the alternative, to make some hard choices in monthly budgeting in order to honour their outstanding financial obligations.
At the end of the second quarter, households owed $1.68 in debt for every dollar of disposable income.
Total household credit market debt, or consumer credit along with mortgage and non-mortgage loans, reached $1.97-trillion. The bulk of the debt came from $1.29-trillion in mortgages, while consumer credit was responsible for $585.8-billion.
Households borrowed $29.2-billion in the quarter, up $3.5-billion from the first quarter. Mortgages accounted for $19.1-billion of the borrowing, compared with $18.4-billion in the previous three months.
It appears more and more Canadians are buying into the narrative that housing prices can only go one way; up!