Delinquency rate could rise
Okanagan Edge Staff - Oct 17, 2018 - Business Buzz

Photo: The Canadian Press

Equifax Canada, one of two Canadian credit bureaus, warns that the delinquency rate could rise in the coming months thanks to a variety of factors.

Increased consumer debt, rising interest rates, slowing economic growth and negative mortgage volume over the last three months means more people might have trouble making ends meet. Average non-mortgage debt increased three per cent in the last year, climbing to $23,271 per person.

The 90-day-plus delinquency rate dropped 3.1 per cent compared to the second quarter in 2017, but it increased from 1.08 per cent to 1.10 per cent from the first to second quarter this year.

“There are certainly signs that new credit demand is slowing,” Equifax Canada vice-president Bill Johnston said in a press release. “A hot car market and home renovations are driving instalment loans. And, at this point, a slow down or less reliance on lines of credit is a positive step as the market moves through a rising rate phase.

“Big ticket purchases have instalment loans leading credit growth, but lines of credit still represent the biggest share of consumer debt. Given that they typically have variable rates, lines will be the first point of impact for higher interest rates, and we are already seeing some of that kicking in.”

If you include mortgages, total consumer debt increased to $1.864 trillion in the second quarter, up from $1.828 in the first.


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