Canadian consumer debt hits $2.66 trillion amid mortgage renewal pressures

Canadian consumer debt has reached $2.66 trillion, a 3.8% increase over the past year, according to Equifax Canada. This growth is largely driven by Generation Z, with over 460,000 new credit product holders entering the market in the last year.

While general delinquency rates are showing signs of stabilization, auto credit remains a notable exception. Delinquency rates for automobile loans are higher than the national average, a trend attributed to rising vehicle costs and restrictive financing rates.

Simultaneously, a wave of mortgage renewals is significantly impacting household budgets. A survey by Rates.ca found that 82% of Canadians who renewed their mortgages since January experienced higher borrowing costs, with most seeing rate increases between 2% and 4.99%.

Nearly 45% of households that renewed their mortgages reported that housing costs now consume half or more of their total household budget. Younger homeowners aged 18 to 34 are particularly affected, with 90% renewing at higher rates and 56% reporting that housing costs consume a substantial portion of their income.