Canadian mortgage debt is growing at a healthy pace—but it doesn’t mean what it usually does. Statistics Canada (StatCan) data shows household mortgage debt rose sharply in October, marking the biggest increase for the month in years. The growth rate has now returned to normal levels, but the underlying composition of that demand is anything but.
Canadian Mortgage Debt Hits $2.39 Trillion
Canadian Household Mortgage Debt In Trillions of Dollars.
Source: StatCan; Better Dwelling.
Canadian households added substantial mortgage debt to their balance sheets. The outstanding balance climbed to $2.39 trillion in October, up 0.47% (+$11.09 billion) for the month. The growth rate was the highest for the month since 2021 and on par with 2019. It was also nearly double the rate seen during the 2022 slump, suggesting the worst may be over—at least for the mortgage industry.
Canadian Mortgage Credit Growth: Returning To Healthy Or Past Peak?
Canadian Household Mortgage Debt: 12 Month Change, Percent.
Source: StatCan; Better Dwelling.
The annual trend is harder to get a read on. Household mortgage debt rose 4.78% (+$109.19 billion) from last year. It marked the highest annual growth for the month since 2022, and was similar to the rate seen in 2019. However, the broader trend peaked in June and has tapered since. It’s healthier than the initial rate hike shock, but it’s a mystery whether growth continues grinding higher.
Canadian Mortgage Debt Growth Fueled Largely By Old Demand
Another mystery is where the demand for mortgage credit is coming from—and what it signals. Credit growth typically reflects household confidence and fuels consumption, especially when borrowing costs aren’t at artificially low stimulus levels. That isn’t what’s happening here, as existing home sales, prices, and transaction dollar volumes all fell.
More likely drivers in the current environment are housing completions. New completions are hitting records, and financing is only obtained after the unit is ready for occupancy. This is very different from existing home sales, as the mortgages would be for pre-construction demand years ago—the bill is just arriving now.
Healthy mortgage credit growth driven by existing demand can create a speed bump this spring. Fixed-rate borrowing costs are market-driven, and much of the current growth reflects old demand finally closing. With completions returning mortgage growth to historical levels, the composition has changed drastically. It’s back to normal at a high level, but new demand has yet to return.
When demand for credit rises relative to supply, it applies upward pressure on fixed-rate costs for both completions and resale financing. Combined with economists now seeing the overnight rate at the floor through 2026, the spring market faces another hurdle.
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