A recent report reveals that Canadians are facing challenges in meeting their mortgage obligations, particularly in pricey real estate markets in Ontario and British Columbia. According to Equifax Canada’s Market Pulse report released on Tuesday, mortgage delinquency balances surged by 32% nationally in the first quarter compared to the same period last year, with Ontario and British Columbia experiencing even higher increases of 52% and 36%, respectively.
The report highlighted the significant financial strain in these high-priced markets, with homeowners who missed payments seeing their average delinquent non-mortgage balances rise to $54,000, a 4.6% increase from a year ago. Additionally, the average delinquent mortgage balance climbed by 13.2% to $355,500. Homeowner insolvencies also rose by 11% compared to the fourth quarter of 2025, with insolvent mortgage holders carrying an average non-mortgage debt of $82,400. The report noted that over 90% of these individuals opted for consumer proposals over bankruptcy.
Despite the spike in delinquency balances, instances of missed mortgage payments remain rare, with the 90-plus-day volume delinquency rate at 0.22%, below pre-pandemic levels. Rebecca Oakes, vice president of advanced analytics at Equifax Canada, emphasized that while mortgage mispayments are relatively low, they serve as indicators of underlying financial stress.
One of the contributing factors to homeowners’ payment struggles is the impact of higher interest rates, according to Oakes. As interest rates began to rise after the pandemic, consumers with mortgages faced challenges, especially during mortgage renewals onto higher rates. Notably, provinces like Quebec and Saskatchewan saw decreases in missed payment levels, contrasting with the situations in Ontario and British Columbia.
Looking ahead, Oakes warned of a potential increase in delinquencies as mortgages come up for renewal at higher rates. She expressed hope for stability in the future, especially with current interest rates remaining unchanged. The report highlighted that overall insolvency volumes have reached their highest level since 2009, indicating ongoing systemic risks despite Canadians’ efforts to manage economic challenges diligently.
Ron Butler, principal broker at Butler Mortgage and host of the Angry Mortgage podcast, attributed the surge in mortgage delinquencies to a “perfect storm” of factors. He pointed to declining home values, higher interest rates, and a challenging job market as key contributors to the rise in delinquencies. Butler underscored the impact of job losses and reduced employment earnings on mortgage payment capabilities, especially for housing investors.
Despite the uptick in delinquencies, Butler reassured that financial institutions are not overly concerned at this stage. He mentioned that while the delinquency trend has sharply increased, it does not pose an unmanageable risk of defaults for banks.
