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Debt loads vary across GTA
Household debt loads are higher in Oakville than Oshawa, but so is the ability to carry them.

thestar.com
June 11, 2015
By Dana Flavelle

Household debt loads are higher in Oakville than Oshawa, but Oakville residents have less trouble carrying their loans, according to a report by a leading consumer credit rating agency.

Compared to the national average, City of Toronto residents carry slight less debt but have a bit more trouble paying it off, the report by TransUnion also shows.

The snapshot of the GTA is contained in TransUnion’s regular quarterly report on household debt to be released Thursday. It’s the first time the company has provided GTA-specific figures.

With almost 20 per cent of the country’s population, the region is a major pool of borrowers, TransUnion noted.

“Toronto’s economy is performing relatively well and has not seen any material negative impact from lower oil prices,” said Jason Wang, TransUnion’s director of research and industry analysis in Canada.

Overall, Canadian borrowers were carrying an average of $20,785 in consumer loans in the first three months of 2015, a figure that’s barely budged over the previous two years, the report found. The figure includes car loans, credit cards, lines of credit and installment loans.

However, more of that debt is in lower-interest rate installment loans while less is being carried on high-interest rate credit cards, the report also found.

Installment loans, which feature fixed repayment schedules, are used to buy things like furniture and appliances.

“Installment loans offer those consumers not able to readily access credit cards, or those who do not have large credit limits, the opportunity to make purchases they otherwise could not accommodate,” Wang said.

Balances on installment loans rose 3 per cent, to an average of $22,212 per borrower, while the number of loans increased by more than 7 per cent to 5.9 million, the report found.

Installment loans also have the highest delinquency rates - where payments have not been made in more than 90 days - at 3.33 per cent. But the rate also fell the most in the first quarter, the report said.

Among provinces, household debt levels declined the most in Alberta, where consumers likely cut spending as falling oil prices led to job losses and declining real estate prices, the report found.

“What we have been observing is a deleveraging trend in the two major cities in Alberta for several quarters,” said Wang.

Among GTA cities, Oakville borrowers had $31,901 in loans on average but a delinquency rate of just 1.37 per cent. The city is in Halton Region, which has the highest average household income in the GTA, according to Statistics Canada.

Oshawa borrowers were carrying $17,738 in loans on average, but struggling more to pay them off, with a delinquency rate of 4.14 per cent. The report shows the average balances alone don’t tell a full story, the company said.

City of Toronto residents had $19,802 in loans with a delinquency rate of 3.38 per cent.

For the GTA as a whole, households were carrying $21,354 with a delinquency rate of 2.81 per cent.

Across Canada, the delinquency rate for all types of loans improved in the first quarter from 2.72 per cent to 2.66 per cent, the report found.

The largest amount of money was borrowed in lines of credit, at an average of $29,146 per borrower. Auto loans were third at $19,190, behind installment loans. Average credit card debt was $3,568 in the first quarter.

Consumer debt loads by GTA city

Average Balance 90+ Delinquency