Average mortgage balance grows 5%
Rising home prices driving up the amount Canadians owe, credit monitoring agency says
TransUnion Canada says the average amount owing on mortgages was up nearly 5 per cent in the second quarter, even though a change in Ontario regulations last spring appears to have reduced the volume of home sales.
The credit monitoring agency says the average mortgage balance in this year’s second quarter was $198,781, up 4.8 per cent from that period last year.
TransUnion says the increased mortgage balance has been driven by rising home prices.
The average new-mortgage balance in the first quarter of 2017 was up 8 per cent from the same time last year at $280,093, despite a 10-per-cent decline in mortgage originations, or new home loans.
Since Ontario introduced more than a dozen measures to improve home affordability, sales reported by the Toronto Real Estate Board showed large year-over-year declines in May, June and July.
Given the size of the Toronto market, the slowdown has had an impact on Canadian averages for both sales and prices.
TransUnion research director Matt Fabian says consumers have so far been able to manage their debt obligations despite the increasing balance levels.
Delinquency rates for mortgages dropped by 0.6 per cent in the second quarter, continuing a trend that began in the fourth quarter of 2016, while the delinquency rates for nonmortgage consumer debt dropped slightly to 2.7 per cent.