Photo: The Canadian Press
The Equifax header is shown in this undated image. THE CANADIAN PRESS / Christopher Katsarov
Consumer demand for credit intensified in the third quarter, mainly on higher mortgage balances and new auto loans, according to data released Monday by credit bureau Equifax.
Mortgage balances and new auto loans increased 6.6% and 11.7% year-over-year, respectively, according to Equifax. Overall average consumer debt rose 3.3% from the third quarter of last year.
Rebecca Oakes, assistant vice president of advanced analytics at Equifax Canada, said in an interview that mortgage lending growth in the last quarter was particularly strong, with the largest increase among people under 35. the measures particularly hit young people.
“In terms of new mortgages, it could be refinancing, or it could be new first-time homebuyers or people moving,” Oakes said. “It was actually the highest value we’ve ever seen.”
The increased demand for auto loans in the third quarter could have been the result of pent-up demand from people who had to wait to buy cars later in the year, Oakes said.
The figures in the Equifax report come from banks and other lenders who provide data to the credit rating agency.
Equifax fixed total consumer debt at $ 2.04 trillion, while Statistics Canada reported in June that household debt reached $ 2.3 trillion, with $ 1.77 in debt for every dollar of income available from households.
More than three million consumers have chosen to use payment deferral programs since the start of the COVID-19 pandemic, according to Equifax. Since the start of this year, some banks have offered consumers the option of suspending their loan repayments for several months, in recognition of the financial pressure the pandemic has created for many households.
However, under payment deferral programs, interest continues to accrue during months for which payments are suspended.
The percentage of balances for which credit users missed three or more payments was at its lowest level since 2014, with deferral programs likely masking true default rates, according to Oakes.