Shopping Habits

Household debt trends improving although still serious, says Carney

OTTAWA – Bank of Canada governor Mark Carney says he’s seeing encouraging developments at the household debt front.

The central banker tells a Commons finance committee that the pace of debt accumulation is slowing and that new home buyers appear like opting in for long run fixed mortgages.

He says household debt accumulation has fallen from about nine or 10 per cent annually to close four per cent.

And he says the bank’s research indicates that new homebuyers are staying clear of more volatile variable mortgages and locking in low rates, which makes them less liable to rate of interest hikes.

However, he repeated his warning that household debt — currently at 151 per cent of disposable income — is the number 1 domestic risk to the commercial recovery.