Miniature House on A Financial Graph

Mortgage debt soared amid the Covid-19 crisis, but expected credit losses remain subdued, according to new research from Statistics Canada.

The national statistical agency reported that mortgage borrowing hit a record high in 2020 as households added almost $108 billion in mortgage debt. That compares with less than two-thirds that amount in 2019 and just under $46 billion in 2018.

StatsCan said the surge in borrowing was powered by a combination of historically low borrowing costs and resilient demand for housing.

“As interest rates fell to historic lows in March, mortgage renewals rose sharply, pushing the total value of mortgage renewals up 13.3% on a seasonally adjusted quarterly basis,” it said.

The report noted that roughly half (49%) of bank borrowers choose five-year fixed-rate mortgages, which is up by seven percentage points from early 2019.

Despite the surge in borrowing and the economic disruption caused by Covid-19, StatsCan reported that expected credit losses on mortgage loans remained at just 0.1% of mortgage debt in the third quarter of 2020.