{"id":16385,"date":"2025-06-08T17:08:19","date_gmt":"2025-06-08T17:08:19","guid":{"rendered":"https:\/\/finderica.com\/?p=16385"},"modified":"2025-06-08T17:08:19","modified_gmt":"2025-06-08T17:08:19","slug":"gen-z-credit-use-up-30-as-canadas-consumer-debt-hits-2-5-trillion","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=16385","title":{"rendered":"Gen Z credit use up 30%, as Canada\u2019s consumer debt hits $2.5 trillion"},"content":{"rendered":"
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For mortgage brokers across the country, the report underscores growing concerns about Canadians\u2019 reliance on unsecured credit, particularly among younger borrowers.<\/p>\n

According to TransUnion<\/a>, Canada\u2019s total consumer debt hit $2.5 trillion in Q1, with growth fuelled by a 30.6% year-over-year increase in outstanding credit balances among Gen Z consumers. Meanwhile, newcomers to Canada accounted for $2.6 billion in new credit balances, at a 6.3% yearly increase.<\/p>\n

\u201cAs a growing share of Gen Z consumers actively engage with credit, lenders face a pivotal opportunity to shape lifelong financial relationships,\u201d said Matt Fabian, director of financial services research and consulting at TransUnion Canada.<\/p>\n

\"Total
Source: TransUnion Q1 2025 Credit Industry Insights<\/strong><\/em><\/figcaption><\/figure>\n

Mortgage readiness slipping as unsecured debt climbs<\/h2>\n

Mortgage professionals say the data reflects what they\u2019re seeing firsthand.<\/p>\n

Tracy Valko, Founder and CVO at Valko Financial, says she\u2019s seeing a growing trend of non-mortgage debt, particularly among younger Canadians and newcomers.<\/p>\n

\u201cMany Gen Z clients are already stretched before they even start the mortgage process,\u201d she told Canadian Mortgage Trends<\/em>. \u201cBetween student loans, credit card balances, and rising living expenses, it\u2019s not uncommon for them to come in with high utilization and limited savings.\u201d<\/p>\n

Similarly, David van Noppen, Mortgage Agent and co-founder at More Than Enough, says that financial education is an increasingly vital missing piece.\u00a0<\/p>\n

\u201cNewcomers are carrying high interest payday loan debt, and Gen Z see debt as a way of life, so they don\u2019t typically understand the cost,\u201d he says. \u201cI spend a lot of time showing the cost of interest in my conversations.\u201d<\/p>\n

According to TransUnion\u2019s report, line of credit balances grew 2.8% through Q1, with credit card balances rising by 3.2% due to both growth in new cards and higher consumer balances overall.<\/p>\n

The pressure is most acute among below-prime and subprime consumers, who are not only taking on more unsecured debt, but also falling behind on repayments at faster rates.\u00a0<\/p>\n

TransUnion notes that subprime consumers are now twice as likely to experience delinquency within the first 12 months of opening a new credit card, compared with figures from 2020.\u00a0<\/p>\n

\u201cThese findings further demonstrate the increased vulnerability subprime borrowers have to macroeconomic factors, such as higher interest rates and increased cost of living\u201d, writes TransUnion.<\/p>\n

Ontario and Alberta lead the country in rising delinquencies<\/h2>\n

Geographically, the report sheds light on which regions are facing the greatest economic stress.<\/p>\n

Alberta recorded the highest non-mortgage delinquency rate in the country at 2.35%, up 16 basis points from a year earlier. Ontario saw the sharpest increase in serious delinquencies, rising 17 basis points to 1.98%.<\/p>\n

\n
\"Non-mortgage
Source: TransUnion Q1 2025 Credit Industry Insights<\/strong><\/em><\/figcaption><\/figure>\n<\/div>\n

\u201cRegional pressures are a major part of the conversation right now,\u201d says Valko. \u201cIn Ontario, for example, especially in areas like the Waterloo Region, we\u2019re seeing a combination of tech layoffs, rising rents, and general uncertainty around job security.\u201d<\/p>\n

TransUnion also pointed to ongoing economic uncertainty around tariffs, warning that potential trade actions could worsen delinquency rates in regions tied to vulnerable industries.<\/p>\n

Why a proactive approach matters for brokers and borrowers<\/h2>\n

Some brokers say these worrying credit trends are prompting changes in how they counsel clients.<\/p>\n

\u201cMy approach is to get ahead of the issue before it becomes a crisis,\u201d says Valko. \u201cThe earlier that clients come to us, the more solutions we can explore together. We also talk about cash flow strategies, such as setting up structured payments, pausing certain expenses, or building a small emergency fund, even if it\u2019s modest.\u201d<\/p>\n

Ross Taylor, broker and credit counsellor, echoes the need for more disciplined budgeting.\u00a0<\/p>\n

\u201cMost debt I see is a result of overspending, not living within their means; treating credit like supplementary income, along with the general pressures from an increased cost of living,\u201d he said. \u201cPeople are often reluctant to eliminate poor habits.\u201d<\/p>\n

As these financial challenges become more common, brokers are increasingly taking a proactive approach, especially as the profile of the average first-time buyer grows more complex. Many are now encouraging longer timelines to homeownership for clients burdened by high-interest debt.<\/p>\n

\u201cI encourage clients to be upfront with their lenders,\u201d Valko said. \u201cMost lenders are open to working with borrowers who communicate early\u2014whether that means restructuring payments or finding temporary relief solutions. But those doors close quickly if clients wait too long and fall behind.\u201d<\/p>\n

Visited 164 times, 164 visit(s) today<\/p>\n

consumer credit consumer credit insights credit gen z matt fabian newcomers ross taylor steven brennan tracy valko transunion TransUnion Canada<\/p>\n

Last modified: June 8, 2025<\/p>\n<\/p><\/div>\n

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For mortgage brokers across the country, the report underscores growing concerns about Canadians\u2019 reliance on unsecured credit, particularly among younger borrowers. According to TransUnion, Canada\u2019s total consumer debt hit $2.5 trillion in Q1, with growth fuelled by a 30.6% year-over-year increase in outstanding credit balances among Gen Z consumers. Meanwhile, newcomers to Canada accounted for<\/p>\n","protected":false},"author":1,"featured_media":16386,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[216],"tags":[3521,1729,238,367,925,128,2570],"class_list":{"0":"post-16385","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mortgage","8":"tag-canadas","9":"tag-consumer","10":"tag-credit","11":"tag-debt","12":"tag-gen","13":"tag-hits","14":"tag-trillion"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16385"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16385\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/16386"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}