Canadian households continued to accumulate financial wealth in the fourth quarter of 2025, as their net worth—the value of all assets minus all liabilities—increased by $230.2 billion to reach $18,594.9 billion, continuing a string of gains that began at the end of 2023. Over 2025, households added more than $1 trillion (+5.8%) in wealth, largely because of appreciating financial assets, which grew 10.5% year-over-year, according to a report released on Monday by Statistics Canada.
The household debt service ratio—measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income—edged down to 14.57% in the fourth quarter of 2025 from 14.61% in the previous quarter, the second consecutive quarterly decrease. While mortgage interest payments declined (-0.6%) in the fourth quarter, obligated mortgage principal payments (+1.0%) rose for the seventh quarter in a row. The effective interest cost of both mortgage (4.16%; annual rates) and non-mortgage loans (8.44%; annual rates) eased in the fourth quarter, added Statistics Canada.
“Among domestic equity markets, the S&P/TSX Composite Index increased by 5.6% in the fourth quarter of 2025, closing out the year 28.2% higher than its 2024 year-end level, the largest annual increase since 2009. By comparison, the S&P 500 Index, a key foreign equity market index, grew a more tepid 2.4% in the fourth quarter of 2025, but nonetheless ended the year 16.4% higher on an annual basis. Altogether, financial market strength helped push households’ financial assets 2.5% higher (+$296.9 billion) to $11,954.8 billion in the fourth quarter,” said Statistics Canada.
“The gains in net worth were likely not evenly distributed among households as the wealthiest households (top 20% of the wealth distribution) accounted for almost two-thirds (65.5%) of Canada’s total net worth in the third quarter, averaging $3.5 million per household. Meanwhile, the least wealthy households (bottom 40% of the wealth distribution) accounted for 3.1% of total net worth, averaging $82,100 per household.
“On the other side of the ledger, household liabilities, composed primarily of mortgage and non-mortgage debt, increased $33.0 billion (+1.0%) in the fourth quarter. Overall, households’ net financial assets—defined as financial assets minus liabilities—increased by $263.9 billion, which followed the largest increase on record (+$448.3 billion) in the third quarter.”
Non-financial assets fell for a second consecutive quarter in the fourth quarter as the value of real estate declined once again. Meanwhile, the ratio of financial assets to non-financial assets climbed to 120.7%, its highest point in over two decades; the value of financial assets surpassed that of non-financial assets in the fourth quarter of 2023, and the gap has since widened, added Statistics Canada.
Maria Solovieva, Economist, TD, said: “Canadian household wealth has now increased for nine consecutive quarters, with financial assets once again doing most of the heavy lifting. However, with equity markets turning more volatile amid geopolitical tensions in the Middle East, this streak could be tested in Q1. U.S. equity markets are currently below their levels at the start of the year, while Canadian equities are only around 2% higher. At the same time, the housing outlook remains soft, with recent data pointing to a cooling market.
“The debt-to-income ratio has deteriorated as credit growth continued, while the debt-service ratio held steady, suggesting that household balance sheets are gradually weakening at the margin. Even so, both measures remain below their peaks in Q3 2022, implying that consumer spending should continue to expand, though likely at a muted pace in Q1.Higher gasoline prices are just beginning to weigh on household budgets. However, the drag could become more pronounced if fuel prices remain elevated for an extended period.”
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