(Adds details from report, background)
OTTAWA, March 15 Canadian household debt as a
share of income rose to a fresh record in the fourth quarter,
data from Statistics Canada showed on Wednesday in a report
likely to underscore concerns consumers are becoming overly
The ratio of debt to disposable income rose to 167.3 percent
from an adjusted 166.8 percent in the third quarter. That meant
Canadians owed C$1.67 ($1.24) for every dollar of disposable
On a seasonally adjusted basis, households borrowed C$28.4
billion in the fourth quarter, up from C$18.7 billion in the
Mortgages made up C$18.9 billion of this, an increase of
C$1.2 billion, while consumer credit and non-mortgage loans were
up C$8.5 billion at C$9.5 billion.
Years of low interest rates since the global financial
crisis, as well as rising home prices, have prompted Canadians
to steadily increase their debt.
The Bank of Canada has flagged the elevated level of
household indebtedness as a potential vulnerability for the
financial system as consumers with large amounts of debt could
find it difficult to adjust to a loss of income or other
However, low interest rates have allowed consumers to pay
down more of their mortgage principal, with payments split
almost evenly between interest and principal in the fourth
quarter, the statistics agency said.
Consumers' ability to pay their debt also remained
relatively easy. The interest-only debt service ratio held at a
record low of 6.1 percent, while the household savings rate
jumped to 5.8 percent from 5.5 percent.
The household debt service ratio, with is obligated payments
of both principal and interest as a proportion of disposable
income, edged down to 14.0 percent from 14.1 percent in the
(C$1 = $1.3459)
(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)