Woman face down on desk, overwhelmed by debt and calculations with calculator

Statistics Canada says the ratio of household debt to disposable income hit a record level in the fourth quarter as mortgage borrowing rose and disposable income fell.

The agency says on a seasonally adjusted basis that household credit market debt as a proportion of household disposable income rose to 186.2% in the fourth quarter, compared with a revised reading of 180.4% for the third quarter. The reading means there was $1.86 in credit market debt for every dollar of household disposable income.

Statistics Canada says the ratio stood at 181.1% at the end of 2019 before the pandemic, while the previous record high was in the third quarter of 2018 at 184.7%.

The increase in the fourth quarter came as household credit market debt rose 1.9% and household disposable income fell 1.3%.

On a seasonally adjusted basis, households added $50.0 billion of debt in the fourth quarter including $46.3 billion in mortgages and $3.7 billion in non-mortgage loans.

The household debt service ratio, measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, rose to 13.84% in the fourth quarter of 2021 compared with 13.55% in the third quarter.