Mortgage borrowing decreased $2 billion to $13.7 billion, coinciding with the introduction of new mortgage regulations and higher interest rates

Mario ToneguzziCanadian households borrowed $22.2 billion in the first quarter of this year, down from $25.4 billion in the previous quarter, says Statistics Canada.

The federal agency reported on Thursday that mortgage borrowing decreased $2 billion to $13.7 billion, the lowest level since the second quarter of 2014.

“This mirrored the 17 per cent decrease in the value of residential resale activity in the first quarter, coinciding with the introduction of new mortgage regulations and higher interest rates,” it said.

StatsCan said total household credit market debt (consumer credit, and mortgage and non-mortgage loans) totalled $2,134.3 billion in the first quarter. Credit market debt as a proportion of household disposable income (adjusted to exclude pension entitlements) decreased from 169.7 per cent in the fourth quarter to 168.0 per cent, as disposable income increased at a faster rate (+1.3 per cent) than credit market debt (+0.3 per cent).

“In other words, there was $1.68 in credit market debt for every dollar of household disposable income. Mortgage debt reached $1,402.1 billion, while consumer credit stood at $627.5 billion.

The seasonally adjusted household debt service ratio, measured as total obligated payments of principal and interest as a proportion of household disposable income for mortgage and non-mortgage debt, remained relatively flat at 13.9 per cent in the first quarter. Meanwhile, mortgage interest payments (+3.7 per cent) continued to outpace mortgage principal payments (-0.2 per cent).”

Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.


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