Aggregate household debt

Aggregate household debt is projected to reach $2,512.7 billion in 2025, representing continued growth from $2,454.1 billion in 2024. This expansion reflects ongoing household borrowing activity despite elevated interest rates that have increased debt servicing costs across the economy. The current performance indicates Canadian households continue accessing credit for housing, consumption, and investment purposes, though at more measured rates compared to previous periods of rapid debt accumulation. Debt growth remains supported by population expansion, household formation, and persistent housing market activity, though rising borrowing costs are constraining the pace of new debt accumulation. The continued increase demonstrates the ongoing role of credit in financing household economic activity, while elevated interest rates are beginning to moderate debt growth patterns compared to the exceptional expansion experienced during ultra-low rate periods.

Aggregate household debt has demonstrated notable resilience over the five-year period from 2020 to 2025, rising from $2,387.6 billion to a projected $2,512.7 billion despite significant economic disruption and policy changes. The period began with substantial debt growth as pandemic-related policy measures, including income support programs and ultra-low interest rates, supported household borrowing capacity. Emergency lending facilities and mortgage payment deferrals helped maintain household credit access during economic uncertainty, while historically low borrowing costs encouraged refinancing and new borrowing activity.

The debt trajectory experienced some volatility during the recovery period, with growth moderating in 2022 as interest rates began rising and economic conditions normalized. However, debt levels resumed steady expansion as households adapted to changed economic conditions while maintaining essential borrowing for housing and consumption needs. The five-year period reflects the dual impact of policy support that initially sustained debt growth and subsequent monetary tightening that moderated but did not reverse the long-term expansion trend.

Population growth driven by immigration has provided fundamental support for aggregate debt expansion, as new households require financing for housing and establishment needs. The housing market boom during 2020-2022 contributed significantly to mortgage debt accumulation, while consumer spending recovery supported non-mortgage borrowing growth. Despite rising interest rates that increased debt servicing burdens, Canadian households have demonstrated capacity to manage higher debt service costs while continuing to access credit markets.

The period has been characterized by evolving debt composition, with mortgage debt representing the largest component of household obligations while consumer credit growth has moderated. Government policy measures including enhanced mortgage stress testing and borrower qualification requirements have influenced lending patterns, though these measures have not prevented continued aggregate debt expansion. The sustained growth in household debt reflects both demographic demand and the central role of credit in supporting Canadian household economic activity.