Situation Update – Canada’s Mortgage Debt

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Canada’s accumulated mortgage debt in 2020 was equivalent to a significant portion of its gross domestic product, according to the central bank.

Figures from the Bank of Canada showed that outstanding mortgage credit increased by $111.12 billion in the 12 months ending January 2021, representing “more than 5% of GDP at the annual rate,” said real estate information portal Better Dwelling. “It almost creates an unnatural looking vertical line when charted.”

The total stood at $1.66 trillion in January, which was 0.41% ($6.82 billion) higher on a monthly basis and 7.19% larger annually.

The January increase “marks the 8th consecutive month of acceleration,” Better Dwelling said in its analysis. “There’s been 22 months of acceleration, if you exclude a single blip in May 2020, at the onset of the pandemic.”

This steady growth has led to significant financial stress for approximately 2/5 Canadians, a recent study by Finder.com found. This amounted to roughly 10.3 million Canadians experiencing substantial debt-related stress, further exacerbated by the COVID-19 pandemic.

This was especially acute among those earning $40,000 to $59,000, 46% of whom expressed anxiety. Only 29% of the nation’s highest earners, those earning $120,000 and above, reported being worried about their debt loads.

Such stress was also more prevalent among women, 44% of whom reported feelings of anxiety, more than men at 35%. Millennials, at 48%, were more worried about their debt than their Gen Z (41%), Gen X (36%), or baby boomer (24%) counterparts.