June 14, 2016 / 1:17 PM / in 2 years

UPDATE 1-Canada debt-to-income edges down in first quarter

(Adds details from report)

OTTAWA, June 14 (Reuters) - Canadian household debt as a percentage of income edged lower in the first quarter but remained high as consumers continued to borrow, data from Statistics Canada showed on Tuesday.

Households held C$1.65 in debt for every Canadian dollar of disposable income. The ratio of household credit market debt to income of 165.3 percent was down from the fourth quarter’s record of 165.4 percent.

The ratio edged down as disposable income and debt increased at nearly the same rate over the quarter.

But borrowing increased by a seasonally adjusted C$24.4 billion ($18.99 billion). Mortgage borrowing made up C$17.5 billion of that, down from C$20.7 billion in the fourth quarter.

Canada’s strong housing market has raised concerns that consumers, drawn by low interest rates, are taking on too much debt. The Bank of Canada said last week that households’ vulnerabilities to an economic shock had increased, in part because of elevated indebtedness.

In the last quarter, though, it remained relatively easy for Canadians to carry their debt, with the interest-only service ratio around its record lows at 6.6 percent.

Reporting by Leah Schnurr; Editing by Lisa Von Ahn

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