Low interest rates continue to drive up household debt

Canadians are still swallowing up low cost debt and its likely to continue for some months yet. That’s the view of Doug Porter, chief economist of BMO Nesbitt Burns, who says that the rate of debt increases has picked up again, noting that BoC figures show an increase in February of 5.2 per cent compared to a year earlier.

He noted that mortgages are fuelling the rise in debt growth, as house price rises mean larger home loans, especially in Toronto and Vancouver. Mr Porter said that as income is not rising as fast as debt, we could be in for an even sharper rise in debt growth in the quarters ahead.

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