Canadian real estate revived an old risk: mortgage debt is back in the driver’s seat. Statistics Canada (Stat Can) data shows household credit climbed again in August, driven almost entirely by mortgage debt. While borrowing remains historically slow, mortgages are still growing much faster than other forms of credit—now accounting for nearly 8 in 10 dollars, a record high. That concentration is amplifying household and economic vulnerabilities.
Canadian Household Debt Tops $3.13 Trillion, Up Nearly 5%
Canadian household debt showed a slight slowdown, but remains lofty. Total household debt rose 0.48% (+$14.98B) to $3.13 trillion in August, up 4.45% (+$133.06B) from last year. The 12-month growth rate recently peaked in June 2025, when it hit the highest rate since April 2023. However, the trend appears to be collapsing despite cheaper household credit and borrowing stimulus.
Canadian Households Own $2.33 Trillion In Mortgage Debt
Canadian household debt: Outstanding mortgage loans, in billions.
Source: Statistics Canada; Better Dwelling.
Canadian household debt remains dominated by mortgages, which rose 0.50% (+$11.49B) to $2.33 trillion in August—up 4.75% (+$105.60B) from last year. Faster growth than last year, but still historically weak by Canadian standards. Outside of the 2018 slowdown and the post-2020 rate shock, this pace hasn’t been typical since 2002.
Canadian Mortgages Represent A Record 74.5% of Household Debt
Canadian household debt: Mortgage loans as a share of total outstanding credit.
Source: Statistics Canada; Better Dwelling.
Mortgage debt now accounts for 74.5% of household credit—the highest share on record. That’s a 7.5 point jump over the past decade, with the 70% threshold only breached in March 2020. It wasn’t even this high at the peak of Canada’s last major credit cycle, in the ’90s.
This kind of concentration is exactly what regulators warned against. It leaves households overexposed to a single, interest rate-sensitive asset—housing. The risk extends beyond borrowers, presenting a risk to the broader economy.
Canadian Mortgage Debt Concentration Amplifies Economic Risks
The growing concentration of mortgage debt amplifies household vulnerabilities. Unlike credit cards or personal loans, mortgages aren’t discretionary spending—households can’t cut back during a downturn. Both net worth and consumption are tied to a single, illiquid asset. When housing drives both debt and wealth, a correction doesn’t just hit homeowners—it reverberates across the whole economy.
This kind of exposure distorts monetary policy, as rate changes disproportionately hit housing and overcomplicates inflation readings and control. With credit growth, GDP, and consumption increasingly tied to real estate, a household correction turns into an economic shock.
The Bank of Canada recently acknowledged this risk. A Deputy Governor recently flagged that inflation readings are skewed by its inclusion of mortgage rates, its inclusion being unique among advanced economies. Adjusting for this could reduce housing’s outsized influence on policy.
That shift may boost long-term stability, but it also exposes this mountain of mortgage debt to a harsher, less accommodative economic climate.