Photo: The Canadian Press

Canadian Mortgage and Housing Corp. says the country’s total residential mortgage debt was $2.08 trillion as of January this year, up six per cent from January 2022.

However, the federal housing agency says in a new report that the rate of growth for mortgage debt has slowed compared to recent years.

The report attributes the trend to inflation, rapidly rising interest rates and cooling housing markets, which have weakened consumer confidence and left fewer home buyers looking to buy.

Many are choosing to reduce their monthly debt servicing costs and opting for shorter-term fixed-rate mortgages because they expect interest rates to eventually drop.

CMHC’s report says fixed-rate five-year mortgages fell to less than 15 per cent of new mortgages in January. They made up 21 per cent of new mortgages in January 2022 and 40 per cent of new mortgages in January 2021.

Variable-rate mortgages fell to less than 20 per cent of new mortgages at the start of this year, down from almost 57 per cent in January 2022 and nearly 25 per cent in January 2021.