Canadian mortgage borrowing is improving, but don’t mistake it for a rebound. Bank of Canada (BoC) data shows household mortgage credit grew in June—marking the third consecutive month of acceleration. Growth is slow and steady, but it still resembles a recession more than a recovery.
Canadian Mortgage Debt Hits $2.3 Trillion, But A Recovery Still Far Away
Canadian household mortgage debt in trillions of dollars.
Source: Bank of Canada; Better Dwelling.
Canadian debt grew faster than last year, but it was still uncharacteristically slow. Households added 0.55% (+$12.45 billion) in mortgage debt to push the outstanding balance to $2.30 trillion in June. Monthly growth has accelerated for the past three months, revealing improved sentiment. However, improved isn’t the same as recovered, and there’s no market boom at this vantage point.
June was larger than last year, but only four years saw the month come in lower over the past 25 years: 2024, 2018 (Ontario foreign buyer tax rollout), 2003 (oil patch recession), and 2000 (dot-com bubble). It’s worth exercising caution when an improvement can be easily mistaken for performance during a recession.
Canadian Mortgage Growth Is Picking Up As 2020-2022 Pre-Construction Boom Turns Into New Home Completions
Canadian household mortgage debt 12-month change in percentage points.
Source: Bank of Canada; Better Dwelling.
Canadian mortgage borrowing is on the slow and steady path to recovery. The outstanding balance in June 2025 was 4.74% (+$103.8 billion) higher than last year, a sharp increase. The annual growth rate appears to have encountered some friction at this level, but it’s remained roughly the same since March. The recent year-over-year trend is the strongest since mid-2023.
Zooming out, it’s hard to appreciate that this is an improvement since the 2020-2022 low rate-fueled credit boom dwarfs it. However, the annual trend is in line with the healthy rate seen this time in 2019. Since larger balances are harder to grow and households added 44.3% (+$704.6 billion) to their mortgage balance from June 2019 to June 2025, some may argue it’s even better now.
Canadian household mortgage credit is performing similarly to existing home sales—it’s improving, but far from a volume considered normal. Accelerating mortgage debt is often viewed as a strong sign of growing market activity, but as mentioned last week—the recent increase is more likely due to investors getting the bill for their pre-construction shopping spree from 2020 to 2022, as they finally reach completion.
None of this is to dismiss the possibility of a near-term recovery, but at this point, drawing any deep market insights from the past 3 months is basically a dice roll.