Report
Q2 2024 Credit Industry Insights
Record-high Canadian household debt, fuelled by mortgages, is straining consumers as rising costs and interest rates increase payment defaults.
Q2 2024 Report highlights include:
- Canadian household debt hits a record high of $2.41 trillion, with mortgage debt making up 74% of the total outstanding balances.
- More Canadians face payment stress as consumption demand grows.
- Percentage of consumers missing payments for 90 or more days continued to rise, up 22 bps year-over-year to 1.74% as higher living costs combined with higher interest rates put more pressure on vulnerable consumer segments.
Average balances for major products held by Canadian consumers continued to grow during Q2 2024, with auto loan balances showing the highest growth (6.2% YoY) driven by higher ticket prices. In Q2 2024, average balances for credit cards grew 4.7% YoY, and installment loan and mortgage average balances grew 4.4% and 3.1%, respectively.
90+ Day Delinquency Rate YoY Changes for All Product Loans
Average Consumer Balance, by Product*
*Represents the average balance held by a consumer across each type of product (consumers can have multiple instances of same product).
“If the Bank of Canada continues to reduce interest rates, payment pressures may ease; however, lenders need to carefully monitor consumer behaviors, and predict and identify resilient versus vulnerable borrowers. Our analysis shows that a 50 bps decrease in mortgage interest rates from current levels could reduce mortgage payments by 12% or more for new or renewable mortgages openings in the coming months and help reduce the number of Canadians that are unable to make their monthly payment”
- Matthew Fabian, Director of Financial Services Research and Consulting at TransUnion Canada
About the TransUnion CIIR Report
TransUnion Canada’s quarterly Credit Industry Insights Report provides in-depth, statistical information drawn from its national consumer credit database (of more than 30 million files profiling nearly every credit-active consumer in Canada). It summarizes data and trends for the national population overall, as well as breakdowns within consumer credit score risk tiers, and provides insights on the Canadian consumer lending industry. By leveraging the Industry Insights Report, institutions across industries can analyze market dynamics throughout an entire business cycle, helping understand consumer behaviour over time. It provides account-level and consumer-level views of key metrics and trends — over the nine most recent quarters — and considers major consumer lending categories: credit cards, personal loans, auto loans, home loans, and lines of credit while also looking at aggregate views of all revolving lines of credit and non-revolving loans.
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