Mortgages helped boost Canadian household credit by 5% in October compared to the previous year, according to a report in The Province. The Royal Bank estimated total household credit at $1.888 trillion, with home mortgages making up 70% of that.
“After recording a 5.4% rate of growth for five consecutive months to kick off 2015, this component of household credit has gradually accelerated against a backdrop of accommodative borrowing conditions and strong housing activity in a handful of markets across the country,” Royal Bank economist Laura Cooper wrote in the bank’s report.
The increase in mortgage borrowing comes as many are questioning the strength of the housing market. While markets like Toronto and Vancouver are still booming, others, such as Calgary, have taken hits from the weakness of the economy.
And although variable mortgage rates are still low, with the Bank of Canada holding the overnight rate target at 0.5%, many lenders’ five-year fixed mortgages have started to rise, The Province reported. Long-term financing, including bonds, debentures, equities and warrants, was up 6.4% in October compared to the previous year.
Mortgage borrowing rose at the fastest pace since 2012 in October, fueling a boost in household credit, the Royal Bank said Friday.