Canadian Household Debt Grew 2x Faster Than 2019, Driven By Mortgages

Canadian household debt grew much faster in early 2025 than it did before the pandemic. In February, total borrowing rose by 0.2 percent, adding about $6.2 billion and pushing the total past $3.04 trillion. That monthly gain was twice as large as similar months in 2019, showing Canadians are borrowing at much higher speed. Even though interest rates are higher now, debt is climbing faster than in normal times.

Most of the debt increase is because of mortgages. Mortgage borrowing went up by 0.2 percent, or roughly $5.2 billion, raising mortgage debt to about $2.27 trillion in February. That is the biggest February increase in three years. Mortgages now make up roughly 106 percent of Canada’s GDP, much more than in countries like the US or Germany.

Borrowing on credit cards, lines of credit, and other consumer loans is much weaker. Consumer credit grew by only 0.1 percent—or about $0.9 billion—putting it at about $776.9 billion. That was the weakest February increase since 2013, showing consumers are not borrowing much aside from mortgages. Slower consumer borrowing often reflects more caution about the economy and jobs.

When looking at the full year, household debt rose by 4.2 percent compared with the year before, meaning Canadians added about $121.6 billion over twelve months. Annual mortgage debt growth was even stronger, at 4.5 percent—its fastest pace in nearly two years. Consumer credit grew at just 3.3 percent, the slowest gain since 2021 for February, underscoring the imbalance in how households borrow.

Mortgage debt accounted for around 84 percent of new household borrowing in February, even though mortgages usually represent about 75 percent of all debt. That heavier reliance on mortgages suggests most debt came from home refinancing or buying newly built homes—rather than existing home sales, which were weak. It reveals that the market is being propped up more by refinancing and new completions than by resale activity.

All of this means Canadian household debt remains heavily tied to housing. Other advanced economies have a more balanced mix of mortgage and consumer debt, but Canada’s debt load is far more concentrated in mortgages. This strengthens systemic risks—especially if interest rates rise, job cuts happen, or property values fall. Despite higher rates, borrowing continues, keeping leverage high and financial risks elevated.