Mortgage Debt Is Rising at Its Fastest Pace in Canada Since 2007

Canadians are piling into mortgages at more than double the historical pace as the housing market appears to moderate after a pandemic boom.

The total value of residential mortgages rose by 1.2% to C$1.73 trillion ($1.4 trillion) in June, according to data released Thursday by Statistics Canada. That’s the fastest monthly increase in loans borrowed for real-estate purchases since 2007.

Mortgage Debt Is Rising at Its Fastest Pace in Canada Since 2007

The spike in mortgages is evidence of Canadians’ demand for more living space during the Covid-19 pandemic, which sent sales and prices to record highs. Driven by lower interest rates, the total amount of real estate-related debt outstanding in the country has risen 9.2% in the past year, the largest increase since 2008. 

Still, the heightened level of borrowing activity is likely to slow alongside Canada’s cooling housing market, where sales volumes have fallen for the past four months. “There is normally a time lag between the sale of a home and the actual receipt of mortgage funds,” the statistics agency said in the release.

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