Canadian Household Credit Commitments Increase 0.7% in April By Investing.com

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© Reuters.

By Ketki Saxena

Investing.com — Statistics Canada today released monthly credit aggregates for Canadian households for the month of April, which include revised estimates from January 2021 through March 2022. These data incorporate new and revised data, as well as as updated data on seasonal trends.

On a seasonally adjusted basis, total household credit commitments increased 0.7% in April from the previous month. Overall, total household credit liabilities stood at $2,709.2 billion in April, up 0.7% (+$18.7 billion).

Household mortgage debt topped $2 trillion in Canada, rising 0.7% (+$13.5 billion) from March to $2,003.8 billion. This represents a slight deceleration from the average increase of 0.8% recorded over the previous three months.

Debt related to non-mortgage loans increased by $5.2 billion (+0.7%) in April to reach $705.4 billion, mainly due to credit card debt and equity lines of credit domiciliary with chartered banks.

Credit card debt with banks rose by $2.2 billion (+2.8%) in April, a third consecutive monthly increase, while an advance estimate of retail sales suggested sales had increased 0.8% in April. On a seasonally adjusted basis, credit card balances in April 2022 were approximately 97% of their level at the end of 2019. Home equity lines of credit with chartered banks increased by $1.5 billion (+ 0.9%) to reach $160.8 billion.

Secured real estate debt, made up of both mortgage debt and home equity lines of credit, also increased by 0.7% (+$15.0 billion) to reach $2,172.7 billion.

The rising level of Canadian household debt comes against the backdrop of rising borrowing costs as the Bank of Canada raises interest rates and bond yields rise, and following the recent financial review from the Bank of Canada which highlighted increased levels of household mortgage debt as a key risk factor for the Canadian economy.

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