Canadian households made $43.8 billion in interest payments in the three months ended June 30, a quarterly record that reflects higher borrowing costs over the past couple of years, according to the latest National Balance Sheet data from Statistics Canada.

Interest payments rose $5.4 billion, or 14 per cent, from the same period a year earlier, the agency said Thursday. Since the second quarter of 2022, interest payments have surged 76 per cent.

The Bank of Canada, in an effort to damp inflation, raised its benchmark policy rate from 0.25 per cent in March 2022 to as high as 5 per cent before embarking on a series of cuts this summer. The overnight policy rate now stands at 4.25 per cent.

In the 12 months through June, Canadians paid $170 billion in interest, which represents 10 per cent of their aggregate total disposable income, up from 8 per cent in 2019.

Including principal, Canadians made $273 billion in total debt payments between July 1, 2023 and June 30, 2024, which represents 16.5 per cent of disposable income, versus 16.2 per cent in 2019. That minor difference, compared with the jump in interest payments, suggests Canadians are paying down less of the principal on their debts in order to cover the higher cost of borrowing.