Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Canadian consumer finances continue to buckle as interest rates surge and savings built up through Covid relief checks dwindle, with closely-watched ratios of household debt to disposable income and debt payments nearing record highs.
Statistics Canada said Wednesday that household debts rose to 184.5% of disposable income in the first quarter from 181.7% in the fourth quarter of 2022. The record high is 184.7% set in the third quarter of last year. Even with the slowest mortgage borrowing in 20 years the ratio rose because of a fall in disposable income, StatsCan said. (See: MNI INTERVIEW: BOC Can Halt Rate Hikes Now: Union Leader)
Households also devoted 14.9% of disposable income to debt repayment in the first quarter, up from 14.4% in the prior three months, and also just short of a record high. More families are losing ground paying off mortgages, with principal payments falling 6.8% as more money went to interest payments. People also refinanced at longer amortizations including nearly half of new mortgages with ultra-long terms.
Household debt to income ratio, source, Statistics Canada
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.