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TORONTO, ONTARIO--(Marketwired - July 24, 2013) - According to the BMO 2013 Household Debt Report released today, while the overall percentage of Canadians carrying debt has increased, the average monthly debt payment has dropped from 2012.

The second annual report, conducted by Pollara, is designed to measure and track the amount of debt Canadian households are carrying and how that debt is being managed.

The report revealed:

• 83 per cent of Canadians have some form of debt, up from 74 per cent in 2012
• However, the average monthly debt payment made by Canadians has declined, dropping from $1,138 in 2012 to $986
• Nearly half (44 per cent) say their household debt level has decreased over the past five years, while 28 per cent say it has increased
• One-third (34 per cent) cite their mortgage as their largest source of debt
• Car loans ranked number two at 19 per cent, while funding an education ranked third at 14 per cent

"Paying down debt as quickly as possible is essential to the long term financial stability of Canadian households, so it's encouraging to see that Canadians' debt burdens have eased over the past year," said Janet Peddigrew, Vice President, BMO Bank of Montreal. "Many appear to be getting a head start on reducing their debt levels while interest rates remain at all-time lows, which is prudent because we don't expect rates to stay that way forever."

"Growth in Canadian household debt slowed to a more sustainable 5 per cent rate in the first quarter of 2013 after averaging almost 9 per cent in the past decade," noted Sal Guatieri, Senior Economist, BMO Capital Markets. "It is expected to moderate further in response to gradually rising interest rates in the years ahead and an aging population."

Canadian Monthly Debt Servicing Costs by Province

According to the report, the majority (58 per cent) of those with debt expect to be debt-free within five years. Specifically, one-third (33 per cent) of mortgage holders expect to be debt-free within five years, while half (56 per cent) expect to be debt-free within 10 years. Among those with other types of debt, 29 per cent expect to be debt-free within the next year.

Ms. Peddigrew added that BMO has been encouraging Canadians to be aggressive in paying down their debt, whether by opting for a shorter amortization for those with mortgages, or by choosing a credit card with a low monthly interest rate.

Demographically, the report revealed:

• Women are more likely than men to say that their debt load has increased over the past five years (32 per cent versus 24 per cent respectively)
• Younger Canadians are the most likely to be increasing their debt load, with 37 per cent of those under the age of 35 saying their debt has increased in the past five years
• Those aged 65 and over are three times more likely to be paying down debt (47 per cent) rather than increasing their debt load (14 per cent)

The BMO 2013 Household Debt Report was conducted by Pollara using an online survey of 1,005 Canadians fielded by Pollara between July 12^th and 16^th. A probability sample of this size would be accurate to +/- 3.1 per cent, 19 times out of 20.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $555 billion as at April 30, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.