As of January 2023, residential mortgage debt in Canada stood at $2.08 trillion, that’s up six percent compared to January 2022.

The latest CMHC Residential Mortgage Industry Report (RMIR) found that Canadian households are facing record levels of mortgage debt.

“With record levels of mortgage debt and the higher cost of living, questions are arising around the ability of Canadian households to make their monthly debt payments,” said Tania Bourassa-Ochoa, Senior Specialist of Housing Research for CMHC. “Although mortgages in arrears remain low, they are a lagged indicator and in challenging financial situations, consumers will typically be delinquent on credit cards, lines of credit, or auto loans before mortgages. Increasing delinquencies for these credit products indicate a larger number of consumers are having difficulties with their debt payments.”

Their report also found consumers are reacting to rising interest rates by choosing options to reduce their monthly debt servicing costs.

Those include opting for shorter-term fixed-rate mortgages in the hopes of decreasing interest rates in the future, and choosing longer amortization periods, meaning they will be paying down their homes over a longer period of time, but for the short-term reducing their mortgage payment.

With the cost of debt rising,  fewer mortgage borrowers are applying for refinancing, as the data shows a 32% drop in refinances in 2022.