Mortgage payments hit an all-time high in the first quarter of the year, with interest payments rising faster than principal payments, according to new data from Statistics Canada (StatCan).
StatCan data showed that Canadians paid $91.42 billion on mortgages in Q1 2019, up by 2.04% from the previous quarter and up by 7.3% from the same quarter last year.
More than half (56%) of Q1 2019 payments went towards interest. Interest represented $51.89 billion of those payments – up by 3.98% from Q4 2018, up by 13.78% from Q1 2018, and up by 27.33% from Q1 2017. It is the largest amount Canadians have spent on interest since Q4 2014, according to StatCan.
In contrast, less payment went towards principal. Principal payments reached $39.53 billion in Q1 2019, down by 0.39% from the previous quarter and down by 0.17% from the same quarter last year.
“Canadians are devoting a record amount of cash to pay their mortgages as debt reaches a new high. That’s not surprising to most,” Better Dwelling said. “What’s surprising is interest paid exceeds the amount towards principal. Canadians are paying ~$1.31 for every $1.00 they put towards their ‘forced savings.’ That’s with interest hovering just above a record low.”