Average Canadian owes $21,696 on top of any mortgages, according to TransUnion


Canadian consumers take up to spend on credit in the first three months of 2017, bringing the common non-mortgage debt across the country to $21,696, up 1.9 per cent annually.

At the selfsame time, the national 90-day delinquency rate for non-mortgage credit accounts cut 1.45 per cent on an annual basis, to 2.72 per cent.

Delinquency measures saw the largest annual declines in Toronto (down 7.55 per cent), Winnipeg (down 3.9 per cent) and Montreal (down 2.51 per cent). All-inclusive debt loads increased in all three of those cities, and others, honest as delinquency rates declined.

“While delinquency rates for subprime borrowers in general are much higher than other risk groups, it’s a positive enlist to see delinquencies decline even as more consumers in this risk body gain access to credit,” said Matt Fabian, director of inspect and consulting at TransUnion Canada, which put out the report Thursday morning.

‘Man are treading water’

Declining delinquency rates may simply reflect the increasing amount of actual debt, said Scott Hannah, chief executive of the non-profit Reliability Counselling Society.

“So while the delinquency has gone down, people are intriguing on more debt, which means they can offset their abiding expenses with additional credit, so they’re able to maintain their least payments,” he said

TransUnion’s recent reports, Hannah pointed out, production consistent annual increases in average Canadian debt levels.

“So while the boom here says that people are managing OK, I think that a more conscientious description is that people are treading water, because debt withs are continuing to rise.”

In September 2016, TransUnion warned that approximately one million Canadians would be in financial trouble if the interest rate on their whole debts, including mortgages, increased by as little as one percentage point.

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The increasing renown of auto loans among Canadian consumers is a worrying sign to one au fait on personal debt. (CBC)

Delinquency rates were up 6.64 per cent for the year in Calgary, 4.84 per cent in Edmonton, and 2.34 per cent in Regina. Indebtedness loads increased slightly in the first two cities, while they declined in Regina.

“I over it’s really interesting that the delinquency rate has actually dropped,” ordered Elena Jara, director of education with non-profit credit guide service Credit Canada Debt Solutions Inc.

Jara said she’s meditate oned a significant improvement in financial literacy since the 2008 financial critical time, and credited increased media awareness and better education by governments and trust counseling services.

Growth in subprime credit cards, auto allowances

At the end of the first quarter of 2017, 20.4 million Canadian consumers were effect a credit card balance, a 3.5 per cent increase from the commencement quarter of 2015.

Subprime borrowers in particular have signed up for lots of new confidence in cards in the past two years, with 14 per cent more clearing access to a card between the first quarter of 2015 and the first lodgings of 2017.

“Serious delinquency rates” for subprime borrowers fell 9.4 per cent all over the same time period. (TransUnion defines “serious delinquency computes” as accounts that are past due by two months or more.)

The credit information body says 2.5 million Canadian borrowers considered subprime now keep access to credit cards.

“We have been seeing that a lot of subprime borrowers set up been acquiring credit, and the reason we see that is mainly because it’s transform into a lot easier to get credit lately,” said Elena Jara of Credit Canada In dire straits Solutions.

“I think the lenders have eased up on the availability of credit to the high-risk consumers because they get that the economy is doing well.”

The $21,696 average non-mortgage obligation in the first quarter of 2017 breaks down across four departments:

  • Auto loans: $20,141 (up 2.67 per cent annually).
  • Credit cards: $3,904 (up 2.23 per cent annually).
  • Instalment advances: $24,795 (up 5.46 per cent annually).
  • Lines of credit: $29,793 (down 1.81 per cent annually).

“I windfall it concerning when I see that the largest growth was in auto instalment accommodations,” said Scott Hannah of the Credit Counselling Society.

“Many of those instalment lends have incentives for people to take out a loan [and make] a very low payment remaining an extended period of time, upwards of seven years,” he said.

“Those unchanged individuals will find themselves underwater after about a year, when the depreciation on the value of that instrument has declined faster than the amount of the loan.”

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