Canadians racked up record levels of consumer debt in the third quarter, new figures from Statistics Canada show.

The ratio of debt to disposable income hit an all-time high of 164.6 per cent in the July to September period. That’s a rise from 163.3 per cent in the second quarter.

Statistics Canada notes that the increase in the most recent quarter was more modest than the one recorded in the previous quarter.

Still, the higher debt ratio figure is sure to prompt more concern from those who have been warning for several years that Canadians risk financial problems once interest rates begin to rise again.

Bank of Canada governor Mark Carney and Finance Minister Jim Flaherty, among others, have repeatedly spoken of the need for Canadians to watch their debt levels.

Rates will rise

Interest rates aren’t expected to rise for at least a year, but Carney warned as recently as this week that they will increase at some point.

He noted that Canadians are now overwhelmingly choosing to lock in to longer-term fixed-rate mortgages rather than taking a chance on going variable – something he said was due, in part, to the Bank of Canada’s repeated signalling that rates will rise.

Warnings that Canadians are financially vulnerable abounded in last week's financial system review from the Bank of Canada.

"The most important domestic risk to financial stability in Canada continues to stem from the elevated level of household indebtedness and stretched valuations in some segments of the housing market," the central bank said.

Canadian households borrowed another $27.3 billion in the third quarter, the federal agency said. Two-thirds of that increase -- $18.4 billion – came from new mortgage debt. Total mortgage debt is now $1.1 trillion.

Statistics Canada noted that mortgage debt increased relatively more than the value of real estate in the third quarter, leading to a slight decline in the percentage of owner equity relative to the value of real estate.

Last month, credit reporting agency TransUnion said its latest quarterly analysis of Canadian credit trends found that average consumer non-mortgage debt jumped 4.6 per cent year over year in the third quarter to an average of $26,768.