New Canadian homebuyers increasingly stretched amid higher rates

Measures of financial vulnerabilities continued to rise in Canada as higher borrowing costs squeezed homebuyers at the end of last year, central bank data show.

Nearly 29 per cent of new mortgages had a debt service ratio greater than 25 per cent in the fourth quarter, up from about 12 per cent a year earlier, according to the data released Friday by the Bank of Canada.

Just under 45 per cent of first-time homebuyers committed more than a quarter of their income to payments on their new mortgage.

And the share of indebted households behind on their debt payments for at least 60 days reached 2.16 per cent, up from 1.92 per cent a year earlier