Personal finances

Statistics Canada says the amount Canadians owe relative to how much they earn fell in the second quarter, as disposable income comfortably outpaced the growth in debt and demand for mortgages fell.

The agency says household credit market debt as a proportion of household disposable income, on a seasonally adjusted basis, fell to 180.5% in the second quarter, compared with 184.2% in the first quarter of the year.

In other words, Statistics Canada says there was $1.81 in credit market debt for every dollar of household disposable income in the second quarter, down from $1.84 in the first three months of 2023.

Meanwhile, 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 — was 14.79% in the most recent quarter, down from 14.9% in the first quarter, when it hit its highest point since 2019.

The moves came as seasonally adjusted household credit market borrowing fell to $17.1 billion in the second quarter compared with $20.4 billion in the first quarter as demand for mortgage loans fell to their lowest point since 2005.

The seasonally adjusted total stock of household credit market debt in the second quarter was $2.86 trillion, up 0.6% from the first quarter, while mortgage debt totalled $2.13 trillion.