While Canadians owe more than ever on their mortgages, fewer borrowers are falling behind on their repayments, according to a new report from TransUnion.
The credit monitoring firm looked at every active credit file across Canada to determine the financial health of borrowers and consumers.
At the end of June, the average Canadian mortgage had $198,781 remaining, an increase of almost 5% over the previous 12 months. Growth in mortgage debt can be partially attributed to high real estate prices, which have prompted people to borrow more than ever to purchase homes.
More people are borrowing as well to enter the property market. "The total number of active mortgage accounts grew annually to 6.0 million, an increase of 1.2 per cent from last year," TransUnion said.
While Canadians are borrowing at record rates to finance their homes, most appear to be staying on top of their debts so far. Mortgage delinquency rates dropped to 0.56% for the third quarter in a row.
Credit agencies consider a debt to be delinquent if a borrower is more than two months behind on payments. A delinquency rate of 0.56% means barely one out of every 200 mortgage holders was more than 60 days behind on payments at the end of June.
“Despite increases in mortgage debt, serious delinquency rates remain low with very little volatility observed over the past two years,” said Matt Fabian, TransUnion Canada's director of research and analysis. “Consumers have so far been able to manage their mortgage obligations despite the increasing balance levels.”