Canada’s debt pile is growing faster than the population using credit, creating a revealing split in household finances. Consumer debt reached a record $2.64 trillion in the second quarter of 2026, according to TransUnion, after outstanding balances increased by $116.7 billion from a year earlier. Yet the number of Canadians with access to credit grew much more slowly.
The figures do not point to a single nationwide debt crisis. Most borrowers continue to make payments, and mortgage performance remains comparatively resilient. Instead, the data show increasingly different experiences: some financially strong households are taking on larger balances, while a smaller group of stressed borrowers is slipping deeper into delinquency or seeking formal debt relief.
The $2.64 Trillion Total Is Only Part of the Story
Canadian consumer debt climbed 4.6% from a year earlier to a record $2.64 trillion in the second quarter. The $116.7-billion increase becomes more significant when compared with growth in the borrowing population. TransUnion counted 32.5 million Canadians with access to credit, only 1.1% more than a year earlier. In other words, the debt stock expanded more than four times as quickly as the population of credit users.
That gap suggests the increase is being driven heavily by larger balances among people already inside the credit system, rather than simply by millions of new borrowers appearing. A household renewing a mortgage, financing a replacement vehicle or carrying a larger line-of-credit balance can increase the national total without changing the number of credit users at all. The result is a debt record that reflects both continued borrowing activity and heavier balances sitting on existing consumer credit files.
Debt Growth Is Strongest at Opposite Ends of the Credit Spectrum
One of the more unusual features of the second-quarter figures is where debt growth occurred. Outstanding balances among super-prime consumers increased 6.5% year over year to roughly $1.74 trillion. At the opposite end, subprime balances increased 5.9% to about $62 billion. Meanwhile, prime balances were essentially unchanged, while prime-plus and near-prime debt grew much more moderately.
Those numbers illustrate why a rising national debt total cannot automatically be interpreted as widespread financial distress. A high-income household with excellent credit may comfortably take on a larger mortgage or vehicle loan, while a financially stretched borrower may increase debt because there are fewer alternatives available. TransUnion also found credit limits expanding at almost the same pace as balances for both super-prime and subprime borrowers. The Canadian credit market is therefore growing at both ends, but potentially for very different household reasons.
Non-Mortgage Borrowers Are Carrying Noticeably Larger Balances
Outside mortgages, the average balance owed by Canadians with non-mortgage debt reached $28,118 during the second quarter, an increase of 7.6% from a year earlier. Every major category measured by TransUnion recorded balance growth. Auto-loan balances rose 7.9%, lines of credit increased 7.4%, personal loans grew 7.1%, and credit-card balances were 5.1% higher.
The pattern matters because these debts compete directly with everyday household expenses for cash flow. A vehicle payment, credit-card minimum and line-of-credit bill may individually look manageable, but collectively they can leave less room for groceries, insurance, utilities or unexpected repairs. Interestingly, average non-mortgage balances did not rise most sharply among subprime borrowers. Super-prime balances increased 5.1% to $32,232, while prime-plus balances rose 5% to $26,927. Subprime average balances actually declined slightly, suggesting higher-risk consumers may be facing tighter borrowing conditions or becoming more cautious.
Mortgage Debt Is Rising Even as the Number of Accounts Slips
Mortgages remain the dominant component of Canadian consumer debt. Total mortgage balances reached approximately $1.93 trillion in the second quarter, up 3.9% from a year earlier. Yet the number of outstanding mortgage accounts declined 0.2%. The average balance on an existing mortgage climbed 4.2% to $293,270, another sign that larger balances rather than rapid growth in borrower numbers are driving much of the increase.
At the same time, the market for newly issued mortgages is showing a different trend. Mortgage originations were up 7.8% year over year, but TransUnion described that as a substantial slowdown from the double-digit increases recorded in recent quarters. The average balance on a newly issued mortgage also fell 2.4% to $354,683. That combination suggests buyers are still entering the market, but affordability constraints are influencing how much they borrow and potentially which homes or markets they can realistically consider.
The Mortgage Renewal Wave Is Still Working Through Household Budgets
The mortgage figures are arriving while another financial adjustment continues to move through Canadian households. The Bank of Canada says many people who borrowed at exceptionally low pandemic-era interest rates renewed at higher rates during 2025 and the first half of 2026. Most have absorbed those increases without triggering a broad rise in loan losses, helped in part by mortgage stress testing and options such as extending amortization periods.
The process is not finished. About 12% of outstanding mortgages consist of longer-term fixed-payment loans expected to renew over the next 12 months, according to the Bank. Those borrowers are projected to experience an average payment increase of roughly 15%. For a household already carrying car loans, credit cards or other expenses, even an affordable renewal on paper can reduce monthly flexibility. The Bank nevertheless expects most borrowers to manage, while acknowledging that highly indebted households with weaker income growth have less room for unexpected costs.
Most Mortgage Holders Are Paying on Time, but Serious Arrears Are Edging Higher
The national mortgage picture remains much more stable than the headline debt total might suggest. TransUnion reported that 99.7% of mortgage holders were making payments on time during the second quarter. Serious mortgage delinquency remained below one-third of 1% by the principal measures used in the report, indicating that widespread mortgage default is not occurring.
Still, the direction has weakened slightly. Consumer-level mortgage delinquency of at least 60 days increased three basis points from a year earlier to 0.29%. Account-level delinquency similarly increased to 0.30%, while the share measured by outstanding mortgage balances rose six basis points to 0.31%. That larger increase in balance-level delinquency is notable because it means financial strain is becoming somewhat more concentrated among people carrying larger mortgages. Borrowers who originated mortgages during the 2022–2023 period have also shown more pressure than some newer cohorts.
Serious Consumer Delinquency Is Becoming More Regionally Uneven
The broader delinquency figures tell a similarly nuanced story. The share of Canadians at least 30 days behind on an account actually declined to 4.27% in the second quarter, compared with 4.34% a year earlier and 4.41% two years earlier. Yet the proportion at least 90 days past due increased to 1.81%, from 1.77% in 2025 and 1.74% in 2024.
That means fewer consumers are entering delinquency overall, while a smaller group already experiencing difficulties is showing deeper financial strain. Geography adds another layer. Alberta’s 90-day-plus consumer delinquency rate increased from 2.29% to 2.41%, the largest provincial increase measured in basis points. Saskatchewan rose from 1.78% to 1.89%, while Ontario increased from 1.90% to 1.96%. Quebec moved in the opposite direction, slipping from 1.27% to 1.25%, underscoring how differently household pressure is developing across Canada.
Ontario and B.C. Stand Out in Mortgage Delinquency Trends
Mortgage stress is particularly uneven when the provincial numbers are separated. Ontario recorded the largest year-over-year increase in account-level serious mortgage delinquency, rising six basis points from 0.26% to 0.32%. British Columbia increased four basis points to 0.27%, while several Prairie provinces were stable or improved. The numbers remain low in absolute terms, but the direction is important in Canada’s most expensive housing markets.
The difference becomes stronger when delinquency is measured by the value of mortgage balances rather than the number of accounts. Ontario’s balance-level rate rose from 0.30% to 0.41%, a 10-basis-point increase, while British Columbia climbed seven basis points to 0.28%. The Bank of Canada has separately noted greater pressure among some highly leveraged Toronto-area borrowers and has pointed to falling home prices as a constraint on refinancing flexibility. Even so, neither dataset indicates a broad mortgage-default wave.
More Canadians Are Turning to Formal Debt Relief
Another warning signal sits outside conventional delinquency statistics. TransUnion reported that its consumer insolvency rate reached 1.10% in the second quarter, up from 0.94% two years earlier. It said the increase was driven mainly by consumers without mortgages, whose filing rates have moved above pre-pandemic levels, while insolvency rates among mortgage holders remain below their pre-2020 levels.
Federal insolvency statistics reinforce the broader trend. The Office of the Superintendent of Bankruptcy recorded 38,804 Bankruptcy and Insolvency Act filings during the second quarter of 2026, 6.6% more than a year earlier. Of those, 29,284 were proposals and 9,520 were bankruptcies. For consumers, proposals have become by far the more common path. Rather than immediately entering bankruptcy, many financially distressed households are using formal arrangements that allow debts to be repaid under revised terms, often after other methods of keeping payments current have been exhausted.
Household Debt Remains Manageable Nationally, but the Margin Is Thin for Some
Canada’s record credit balance sits within an economy where household debt servicing still absorbs a meaningful portion of income. Statistics Canada reported a household debt-service ratio of 14.75% in the first quarter of 2026, up from 14.68% in the previous quarter. Debt payments increased faster than household income during that period, while mortgage interest payments also moved higher.
There are nevertheless signs that the broader credit system is stabilizing rather than rapidly deteriorating. TransUnion’s Credit Industry Indicator rose to 100.9 in the second quarter, half a point above the previous quarter and two points higher than a year earlier. Combined with low mortgage delinquency and declining early-stage consumer delinquency, that argues against treating $2.64 trillion as evidence of an immediate credit crisis. The more consequential story is distribution: debt is growing faster than the borrower population, and the financial room available to carry that debt varies dramatically from one household to another.
