Skip to content

Personal debt level concerns are overblown…!

record low ratesThere’s a lot of talk in the media about Canadians carrying too much debt.   We’re getting hammered with messages of ‘record high personal debt levels’.   It’s true.  Our mortgage balances are higher, car loans are higher, student loans are higher, personal loans and lines of credit balances are higher.

Is this a problem?  Are Canadians in trouble?  Is this a reason to panic?  Let’s try to answer…

Well, here’s one very interesting stat that might crush that statement once and for all.   Canadians, on average, spend 14% of after-tax income on personal debt. 

Did I surprise you?   I’ll bet most people thought that number would be way higher given all the negative reports in the media. 

Do things go up in price or do they go down?  Obvious answer, they go up in price.    So, we can agree that a trip to the grocery store, dry cleaners, clothing store, movies, restaurant, car dealer, etc, has all cost more than it did 20 years ago.    And yes, homes cost more today than they did 20 yrs ago.

Why wouldn’t we expect personal debt levels to rise?   Seems kinda silly, doesn’t it?

Hey, here’s some more stats..  Defaults and arrears haven’t climbed, they have dropped.  That’s right..  the latest stats from the Canadian Bankers Association shows mortgage arrears are 0.27%... This is very close to our all-time low!!

Look, record low interest rates are playing a big part in our debt levels.  We are borrowing higher amounts…however, our ability to service these debts is still very good.  Isn’t it logical to assume that our debt level will also climb?


You shouldn’t borrow money with a reason…  just because money is cheap doesn’t mean you should start spending foolishly.  Canadians have been pretty good about how they spend.  Borrowing to invest is good.  Buying  a home is good.. with a long term horizon, not short flip.   This is wise borrowing and investing.  The last time I looked, home prices have been going up for…… oh, the last 100 years!

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114

Steve Garganis View All

As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: