By Ketki Saxena
Investing.com -- In the first quarter of this year, Canada experienced a significant increase in its total outstanding debt. According to TransUnion's latest report, the country's combined debt reached an all-time high of $2.32 trillion.
This surge in debt can be attributed to several factors, including rising living costs due to elevated inflation rates and interest rate hikes. As a result, many Canadians have turned to credit as a means of coping with these financial pressures.
The number of individuals with access to credit has grown by 2.9% compared to last year. Notably, there has been an 8.3% increase in subprime consumers who now have access to credit facilities.
Credit card issuers have also seen remarkable growth during this period; new account originations rose by 20%. This is likely due to fierce competition within the industry that encouraged more people to apply for cards. At the same time, average monthly payments on lines of credit witnessed a substantial jump – up by 43%, reaching $436 per month on average.
On the other hand, mortgage origination experienced a decline as higher interest rates led potential homebuyers towards reconsidering their options– particularly those looking into refinancing their existing mortgages. Mortgage originations decreased by almost one-third (32%) compared with figures from last year.
It is worth noting that while delinquency levels among serious consumer borrowers increased during this time frame; overall delinquency numbers are still lower than what they were before the pandemic began.