Canadian consumer credit balances reach $2.52 trln, up 4.4% YoY.

• Total Canadian consumer credit balances reached $2.52 trillion in Q2 2025. • Balances rose 4.4% YoY and 15% since Q1 2022. • Inflation contributed to the growth in consumer balances. • Average non-mortgage balances rose 10% since 2022. • Home affordability remains a challenge. • Average new mortgage sizes climbed 6.9% YoY. • Regional disparities in cost of living and wage growth affected delinquency trends. • Alberta saw the highest level of serious delinquency at 2.29%. • Once inflation is factored in, the actual increase was 3% or $0.08.

The Canadian credit market has shown signs of recovery in Q2 2025, with total consumer credit balances reaching $2.52 trillion, according to TransUnion's Q2 2025 Credit Industry Insights Report [1]. This represents a 4.4% year-over-year (YoY) increase and a 15% rise since Q1 2022, driven largely by inflation. However, when adjusted for inflation, the actual increase was just 3% or $0.08 trillion, indicating a more modest real growth in what Canadians owe.

The report highlights that average non-mortgage balances rose 10% since 2022, while home affordability remains a challenge. Average new mortgage sizes climbed 6.9% YoY to $368,432, underscoring the ongoing affordability challenges facing homebuyers. Regional disparities in cost of living and wage growth have also contributed to varying delinquency trends across Canadian provinces. Alberta saw the highest level of serious delinquency at 2.29%, rising 11 basis points from the previous year.

The report also notes that more than two million Canadian mortgages are set to renew between 2025 and 2026, with many secured at ultra-low interest rates near 1%. As these loans reset, borrowers will likely face significantly higher monthly payments, with the average monthly payment up 4.7% for the average consumer in Q2 2025.

Despite the challenges, the consumer credit index continued to decline in Q2 2025, reflecting softening consumer spending and subdued credit demand. The overall consumer-level serious delinquency rate (90 days or more delinquent on any product in wallet) has grown slightly, up 4 basis points to 1.77%, consistent with pre-pandemic levels.

The report underscores the need for financial institutions to remain vigilant and adopt proactive risk management strategies as mortgage renewals accelerate and regional economic pressures mount. Lenders must support consumers through this transitional period to navigate the challenging post-pandemic recovery phase.

References:

[1] https://www.marketscreener.com/news/canadian-credit-market-shows-signs-of-recovery-as-new-mortgages-rise-51-year-over-year-ce7c51dbdd8bff20