Canadian households under pressure as debt servicing strains intensify

Canadian households are under pressure as debt servicing issues increase. According to TransUnion’s Consumer Pulse study in the second quarter of 2025, 27 per cent of respondents reported that they were unable to cover all of their financial obligations, even though the Bank of Canada cut interest rates earlier this year.

Millions of households are still feeling the effects of high interest rates on mortgages, personal loans and credit cards. Fixed-rate mortgage holders are also facing sudden increases in payments at renewal. Canadians who took out mortgages during the pandemic are now facing payment pressures and affordability issues, says a financial expert.

Despite the challenging circumstances, Canadians are still demonstrating financial resilience and have changed their spending habits. 51% of people are concerned about the economic downturn, and many consumers are anxious about future expenses, especially housing costs and debt repayments.

In the area of financial advice, it is recommended to review loan terms, assess debt-service ratios, encourage contingency planning, and monitor credit trends. The results of this study emphasize the importance of comprehensive financial planning in these circumstances. The next Bank of Canada interest rate announcement is scheduled for July 30, 2025.

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