According to Equifax, Canadians’ debt profiles have evolved throughout the course of the pandemic, with mortgages accounting for a higher amount of people’s debt. Consumer debt in the first quarter of 2021 was $2.08 trillion, up 0.62 percent from the fourth quarter of 2020 and 4.78 percent from a year ago, according to the business. The increase was mostly fueled by mortgages, according to the report, with the number of new mortgages up 41.2 percent from a year earlier, when the pandemic began in the country.
However, according to Rebecca Oakes, assistant vice president of advanced analytics at Equifax, the rate of new mortgages fell in the most recent quarter compared to the last quarter of 2020. In terms of the percentage of new buyers who are first-time homebuyers, we saw a slight decrease this quarter. “So that could be a little bit of a concern on that front,” Oakes added.
Consumer debt increased the most in B.C. and Ontario, she added, as a direct result of both jurisdictions’ high property prices. At the same time, the credit reporting agency said that consumer credit card debt had reached a six-year low, owing to lower spending patterns that led to better daily spending habits.
“And that’s a great good,” she said, adding that consumers are saving “a little bit more” and that people of all ages are paying off debt with higher interest rates. “For example, in January, for every $10 spent on a credit card, we saw $11 in payments come through.” Other large-ticket credit goods, such as lines of credit, have also contributed to the overall increase in Canadian debt.