Canadians Are Struggling With Mortgage Payments

You are here:

Canadians are increasingly struggling to keep up with their mortgages, especially in high-priced Ontario and British Columbia markets, a new report says.

Equifax Canada’s Market Pulse report, published Tuesday, said mortgage delinquency balances were up 32% nationally in the first quarter compared with the same period last year, with Ontario and British Columbia leading provinces at 52 per cent and 36 per cent, respectively.

“This missed payment level highlights severe financial strain in high-priced markets,” Equifax Canada said in a news release.

For homeowners who have missed a payment, their average delinquent non-mortgage balances reached $54,000 in the quarter, a 4.6% increase compared with a year ago. The average balance of their delinquent mortgages also climbed 13.2% to $355,500.

Homeowner insolvencies were up 11% compared with the fourth quarter of 2025, according to the report, with insolvent mortgage holders carrying an average non-mortgage debt of $82,400. More than 90% of those individuals chose consumer proposals over bankruptcy, the report said.

Despite the increase in delinquency balances, missed mortgage payments are rare — the 90-plus-day volume delinquency rate sits at 0.22%, which is below pre-pandemic levels.

“Overall, when you look at mortgage mispayments, it is quite a small percentage, because consumers generally, they will try and protect their mortgage as long as possible,” Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, said in an interview.

“But the reason we do focus a lot on mortgages is because it does demonstrate what the underlying financial stress is as well.”

Higher interest rates play a role

Higher interest rates are a reason homeowners are having trouble keeping up with payments, Oakes said.

“During the pandemic, we saw interest rates were super low. As those interest rates started to rise, we started to see the impact a little bit coming through on consumers with a mortgage,” Oakes said.

“In the last two years in particular, as those individuals have come to renew their mortgage on to higher rates, we’ve seen a bigger impact in terms of missed payment levels on the mortgage side of things.”

Not all provinces share Ontario and British Columbia’s pain. Quebec and Saskatchewan, for example, have seen missed payment levels go down.

Oakes said there could be an uptick in delinquencies as mortgages come up for renewal at higher rates.

“The hope, of course, is that eventually these things start to stabilize. Interest rates have been held for a little while now,” she said.

“The big concern will be if interest rates go back up again, will that add some additional financial pressure into the ecosystem.”

The report found overall insolvency volumes have risen to the highest level since 2009, adding that systemic risks persist even while Canadians are staying financially disciplined to cope with economic challenges. Insolvency volumes for the first quarter of 2026 were up 18.8% year-over-year.

Delinquencies result of ‘perfect storm’

Ron Butler, principal broker at Toronto-based Butler Mortgage and host of the Angry Mortgage podcast, said a “perfect storm” of factors has combined to cause the delinquencies.

The most important, he said, is the decline in home values over the last few years.

“Because when people are impacted by general unaffordability or by any kind of unemployment or underemployment, they could always reach into their house, from about 2009 straight through till 2023,” he said.

“That’s all gone now … everybody who bought from 2020 to 2022, their house is worth much less than they paid for them in Ontario.”

Higher interest rates and a tough job market are also part of the delinquency equation, Butler said.

“People are impacted by job loss and a reduction of employment earnings — there may not be a bonus this year, there may not be any overtime,” he said. “So when you combine a higher mortgage payment with a more precarious employment problem, you get mortgage delinquencies.”

Butler said housing investors are more likely to go delinquent. He points to Brampton, Ont., as an example of a city where delinquency and foreclosure rates are high. Many buyers there acquired properties to raise revenue from housing international students. The investors ended up in trouble as the number of students declined.

Despite the delinquency increase, Butler said financial institutions are not yet concerned. “Even though the trend has been so dramatically up, they do not represent an unmanageable delinquency or default rate for any of the banks,” he said.