Bank of Canada Governor Mark Carney and other policymakers have no doubt been scaring the pants off consumers who have loaded up on debt like there’s no tomorrow. Well, there is a tomorrow, and that was their aim. 

But while the risk of overweight debt levels is a “significant” one to the economy, the effects of the inevitable rise in interest rates should not be overestimated, National Bank Financial says in a new report.  

Carney has warned repeatedly that household debt levels are too high, and Finance Minister Jim Flaherty recently tightened up the mortgage market again. This came as the ratio of household debt reached a whopping 148% of disposable income – a level higher than in the US. 

“It’s not that Canadians are throwing money out the window,” said Yanick Desnoyers, Assistant Chief Economist at National Bank Financial. “Rather they are buying more houses, taking the homeownership rate to a record 70%. Since very few homebuyers pay cash, the resulting indebtedness is hardly surprising.”

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