Households’ debt-to-income ratio dips as income growth outpaces debt — SkimNews
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- Statistics Canada reported the household debt-to-income ratio fell to 176.4% in Q2 from 178.6% in Q1, meaning households held about $1.76 in credit market debt per dollar of disposable income.
- The household debt service ratio — obligated principal and interest payments as a share of disposable income — dropped to 14.52% from 14.68%.
- Seasonally adjusted household credit market borrowing slowed to $29.4 billion in Q2, down from $34.4 billion in Q1.
- Mortgage borrowing fell to $19.4 billion, the slowest pace since Q1 2024.
- Non-mortgage borrowing, including consumer credit, slowed to $10.0 billion for the quarter.
Why it matters: Canadian households now owe $1.76 for every dollar of disposable income, with 14.52% of that income going to debt payments — down from 14.68%. The quarterly drop in total borrowing from $34.4 billion to $29.4 billion, driven by the slowest mortgage borrowing pace since Q1 2024, points to softening credit demand across both housing and consumer debt.
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