Residents of the country's two largest cities may find themselves more "vulnerable" to interest rate increases as personal debt levels in Toronto and Vancouver continue to hit record levels, according to a new report from Canada Mortgage Housing Corporation,which says the debt-to-income (DTI) ratio for those living in Vancouver climbed to 242% in the second quarter ended June 30.
That means that for every $1 of disposable income, $2.42 is owed. The ration was similarly high in Toronto, where the DTI was at 208%.
The housing agency adds that this is the highest ratio recorded for both cities for any second quarter since 2015. Nationally, the DTI ratio was 171%. It's mostly the result of mortgage debt, which accounts for two-thirds of all outstanding household debt in Canada.
The report noted that higher interest rates mean that households could see an increase in the amount required for debt repayment, and that could exceed their original budgets.
