Canada’s debt juggle

Wealth Awesome September Newsletter

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Summary

Canada’s Debt Juggle: Mortgage Payments Hit New Heights 🤡 

In Q2 2024, Canada’s debt servicing ratio increased to 15%, driven by rising mortgage debt payments as many households renewed fixed-rate mortgages at higher rates.

Although non-mortgage debt costs decreased slightly following the Bank of Canada's interest rate cut, this was insufficient to offset the growing mortgage burden.

Household debt approached $3 trillion, with mortgage borrowing accounting for the majority.

Meanwhile, household net worth saw modest growth due to financial asset appreciation, despite a dip in real estate values. The debt-to-disposable income ratio declined for the fifth straight quarter, but debt payments continue to outpace income growth.

⏱️ TLDR: Housing costs continue to have disproportional impact, consumers need more

to reduce the pain 🩹 

Key Takeaways 💡

1. Mortgage payments hit record highs, pushing the debt servicing ratio to 15%.

2. The Bank of Canada's rate cuts helped non-mortgage debt but weren’t enough to offset rising mortgage renewals.

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Canada Stocks last 30 days

Ouch CNQ!

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See you next month!

The Wealth Awesome Team

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