Debt is rising twice as fast as in 2019 – with mortgages driving the surge
Canadian households have officially crossed a new milestone: total credit market debt exceeded $3 trillion for the first time in the fourth quarter of 2024, according to Statistics Canada. Despite high interest rates and weak home sales, borrowing remains strong – and the primary driver is mortgage debt.
While borrowing appears slower compared to the frenzied low-rate years of 2020–2021, debt is still growing twice as fast as it did in 2019. February alone saw household debt climb 0.2% (+$6.2 billion), reaching $3.04 trillion, led overwhelmingly by mortgages.
Mortgages Now Represent 75% of Canada’s Household Debt
Mortgage debt hit $2.27 trillion in February 2025, advancing 0.2% in a single month, the biggest increase for a February in three years. Mortgages now represent about 106% of GDP, far exceeding levels seen in peer countries like the U.S. (~67%) and Germany (~55%).
Even with existing home sales remaining sluggish, mortgage credit has surged. The explanation? Likely pre-construction completions and homeowners refinancing to tap equity.
Mortgage credit made up 84% of new household debt in February, despite normally representing about 75% — showing a clear overdependence on housing-related borrowing.
Consumer Credit Growth Slows to a Trickle
While mortgage debt climbed, consumer credit growth weakened, rising only 0.1% (+$0.9 billion) to reach $776.9 billion. This marks the weakest monthly growth for consumer credit since 2013, signaling weakening confidence.
Consumer borrowing is typically a reflection of optimism. The slowdown suggests Canadians are more cautious, likely in response to rising unemployment, trade uncertainty, and elevated borrowing costs.
Year-Over-Year Debt Growth Hits 4.2%
Despite slower month-over-month activity, annual household debt growth is picking up again. As of February 2025:
- Total household debt rose 4.2% year-over-year, or $121.6 billion
- Mortgage debt grew 4.5%, the highest pace in nearly two years
- Consumer credit rose 3.3%, its weakest February gain since 2021
This annual pace mirrors 2019 levels, but the debt base is now roughly 40% larger than it was then. That makes this growth more concerning, as it reflects rising leverage on an already massive balance sheet.
Systemic Risk Remains Concentrated in Housing
Canada’s household debt burden continues to be heavily reliant on housing, increasing its exposure to market volatility. While other advanced economies have seen a more balanced mix of consumer and mortgage credit, Canada stands out for its dependence on real estate.
This concentration is being amplified by mortgage debt’s outsize role in total borrowing. Despite higher rates, the structure of Canada’s housing and credit system has enabled continued leverage — reinforcing long-standing concerns about financial stability.
Quick Stats:
- Total Household Debt (Feb 2025): $3.04 trillion
- Mortgage Debt: $2.27 trillion (+0.2% monthly, +4.5% annually)
- Consumer Debt: $776.9 billion (+0.1% monthly, +3.3% annually)
- Debt-to-GDP Ratio (Mortgages Only): ~106% (vs. U.S. ~67%)
- 84% of new household debt added in Feb was mortgage-related
References:
- Statistics Canada – Household credit market summary
- Better Dwelling – Canadian households owe over $3 trillion, mostly mortgages
- Bank of Canada – Credit Indicators
Canada Housing Market 
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