Canadian household debt is the highest in the G7 as a percentage of income. While mortgages make up most of this, credit card debt, lines of credit, and HELOCs (Home Equity Lines of Credit) can be expensive traps.
Canadian debt types and their costs
| Debt type | Typical rate | Priority |
|---|---|---|
| Credit card (standard) | 19.99-22.99% | Highest |
| Retail store card | 24.99-28.99% | Highest |
| Unsecured personal loan | 8-18% | Medium-high |
| Student loan (federal) | Prime rate (no interest since 2023) | Low |
| Line of credit (unsecured) | Prime + 1-5% (~8-12%) | Medium |
| HELOC | Prime + 0.5% (~7.7%) | Lower (secured) |
| Mortgage | 5-6.5% (fixed/variable) | Lowest |
💳 Credit Card Payoff Calculator (CAD)
Time to pay off
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⚠️ The HELOC trap
Many Canadian homeowners treat their HELOC like a bank account — drawing on it for renovations, cars, or vacations at "only" prime + 0.5%. At current rates (~7.7%), a $50,000 HELOC balance costs $3,850/year in interest. It's still debt. HELOCs can be called by lenders, and a home equity decline could trigger margin calls. Treat it with respect.
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