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Statistics Canada says the ratio of household debt to disposable income hit a record level in the fourth quarter as mortgage borrowing rose and disposable income fell.

The agency says on a seasonally adjusted basis that household credit market debt as a proportion of household disposable income rose to 186.2 per cent in the fourth quarter, compared with a revised reading of 180.4 per cent for the third quarter. The reading means there was $1.86 in credit market debt for every dollar of household disposable income.

Statistics Canada says the ratio stood at 181.1 per cent at the end of 2019 before the pandemic, while the previous record high was in the third quarter of 2018 at 184.7 per cent.

The increase in the fourth quarter came as household credit market debt rose 1.9 per cent and household disposable income fell 1.3 per cent.

On a seasonally adjusted basis, households added $50.0-billion of debt in the fourth quarter including $46.3-billion in mortgages and $3.7-billion in non-mortgage loans.

The household debt service ratio, measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, rose to 13.84 per cent in the fourth quarter of 2021 compared with 13.55 per cent in the third quarter.

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