Measures of financial vulnerabilities continued to rise in Canada as higher borrowing costs squeezed homebuyers at the end of last year, central bank data show.

Nearly 29 per cent of new mortgages had a debt service ratio greater than 25 per cent in the fourth quarter, up from about 12 per cent a year earlier, according to the data released Friday by the Bank of Canada.

Just under 45 per cent of first-time homebuyers committed more than a quarter of their income to payments on their new mortgage.

And the share of indebted households behind on their debt payments for at least 60 days reached 2.16 per cent, up from 1.92 per cent a year earlier

The data highlight mounting pressure on the pocketbooks of Canadian homebuyers as interest rates eat up a greater share of incomes. Higher borrowing costs are also crushing mortgage originations, which have fallen to about 150,000 from nearly 280,000 at the pandemic peak, mirroring a collapse in home resales.

The Bank of Canada says it uses the share of new mortgages with debt service ratios greater than 25 per cent “to identify the most vulnerable households,” which may be more likely to fall behind on payments when a negative income shock or an increase in rates occurs.

“Increasing financial vulnerabilities are clearly a reason the Bank of Canada paused its rate hiking cycle,” Royce Mendes, head of macro strategy at Desjardins Securities, said in a report to investors. “The question is whether the economy and inflation will cooperate soon enough to allow central bankers to remain on hold.”

On Friday, employment grew more than expected for a third straight month, underscoring a resilient labor market that’s at odds with expectations of an economic slowdown and the Bank of Canada’s rate pause. February inflation figures are due on March 21.