Mortgages account for nearly three-quarters of Canada’s debt as consumers wait for lower interest rates Page 1

TransUnion Key Findings report:

• Canadian household debt hits a record high of $2.41 trillion, with mortgage debt accounting for 74% of total outstanding balances.
• More and more Canadians are experiencing payment stress as consumer demand increases.
• The percentage of consumers who have not made payments for 90 days or more has continued to rise, up 22 basis points year-on-year to 1.74%, as higher living costs coupled with higher interest rates put more pressure on vulnerable consumer segments.

TORONTO, Aug. 27, 2024 (GLOBE NEWSWIRE) — Canada’s total credit debt grew 3.2% year-over-year (YoY) to a record $2.41 trillion during the first quarter of the year, according to TransUnion Canada’s Q2 2024 Credit Industry Insights Reportwhich is produced quarterly to track trends and the health of the consumer credit market. Mortgage debt, which accounts for 74% of total debt, remains relatively healthy, supported by strong credit quality among mortgage holders and rising home prices. Non-mortgage debt, which includes credit cards, loans and lines of credit, continues to rise, reflecting the higher consumption needs of Canadian consumers.

The TransUnion Credit Industry Indicator (CII) decreased slightly by one point compared to last year to 104.5. This was due to a decrease in the supply of credit combined with an increase in the number of delinquencies. This was partly offset by higher balances and strong demand for credit.

Credit access – the total number of credit-active consumers – is a key driver of this growth, up 3.7% year-over-year. As of Q2 2024, there will be 32 million Canadians with at least one active credit product in their wallet, representing approximately 92% of adult credit-eligible Canadians. Younger Canadians are driving the increased participation, with Millennials (born between 1980 and 1994) and Gen Z (born between 1995 and 2010) accounting for $98 billion in annualized growth in outstanding balances. Gen Z consumers continue to be the fastest-growing segment, as more of this group reach credit-eligible age (18+) each year and enter the credit market for the first time.

New credit openings grew 10.4% year-over-year (representing $77.9 billion in balances), driven by credit cards, with new credit card balances¹ by 7.5%. This is partly due to the continued influx of Gen Z consumers into the credit market, who typically open a credit card as their first credit product. New mortgage originations have stagnated, leading to an increase in real estate supply as high interest rates continue to sideline some buyers.