Searches for this product significantly outstripped that of mortgages
Over the past year, Canadians indicated a markedly increased interest in payday loans over other product types, according to the latest data from search analytics firm SEMrush.
In the period covering June 2017 up to June 2018, the search volume for payday loans reached an average of 29,000 a month on platforms like Google. Payday loans thus ranked first among 10 different loan types Canadians searched for in this period, The Canadian Press reported.
To compare, the same online users searched for mortgages at a rate of only 18,800 a month during the same time frame. Student loans racked up 17,800 searches per month, with consolidation loans and car loans following suit.
Products such as payday loans – which were accumulated amid the record-low interest rates of past years – have become an important lifeline for households trying to stay afloat, but paying off the debt accrued during this period will likely prove to be a significant challenge for Canadian borrowers, according to a recent analysis using data from Equifax.
The study conducted by the Canada Mortgage and Housing Corporation found that average monthly housing payments were much higher in Q1 2018 compared to Q4 2017.
Read more: Higher rates to choke indebted households further
In particular, Toronto and Vancouver displayed worrying trends. The average monthly mortgage payment in Toronto stood at $1,662 in Q1, representing a 6.4% increase from the last quarter. In Vancouver, this figure was even more pronounced at $1,794 per month by the end of the first quarter, up 6.53% from Q4 2017.
In contrast, Montreal saw the average payment reach $1,060 in Q1, up 2.51% from the quarter prior.
The CMHC attributed the significant Toronto and Vancouver increases to a heady cocktail of rising rates and large debt loads. The analysts also warned that this is just the beginning as interest rates are beginning to normalize, following several years of rock-bottom levels.
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