Equifax says Canadians took out fewer new mortgages even before interest rates began to rise last week, but consumer debt continued to increase in the fourth quarter.

The company says the number of new mortgages declined 8.1 per cent year over year in the last three months of 2021. The biggest drop was in some of the country's hottest housing markets with Toronto and Hamilton falling 16.1 and 18.7 per cent, respectively.

Rebecca Oakes, assistant vice-president of advanced analytics at Equifax, says skyrocketing house prices have decreased housing affordability while lenders started to move interest rates up in anticipation of the Bank of Canada's increase in its benchmark rate last week to 0.50 per cent.

The average loan for new mortgages increased 10.1 per cent from the fourth quarter of 2020 to $355,000, but dropped 1.5 per cent from the third quarter for the first decrease since the pandemic began.

Equifax also says average consumer debt, excluding mortgages, rose 7.9 per cent to $2.2 trillion as credit card spending was up 14.4 per cent in the fourth quarter from a year earlier and up 9.8 per cent from the third quarter.

However, overall delinquencies remained low and declined. Mortgage delinquency fell 31.8 per cent year-over-year to 0.11 per cent and non-mortgage delinquency decreased 20.7 per cent to 0.86 per cent.