According to Equifax Canada’s latest Market Pulse Report, the national mortgage fraud rate dropped to 0.2% in Q4 2024—a level not seen since Q2 2022.
“The mortgage fraud rate has remained relatively low, with application fraud significantly down by 37.6%,” said Cherolle Prince, Director of Fraud Consulting at Equifax Canada.
Despite the overall decline, Alberta, Ontario, and Quebec continue to report higher-than-average rates of mortgage fraud compared to other provinces.
The data also shows that consumers without an existing mortgage—many of them prospective first-time buyers—were nearly twice as likely to commit mortgage fraud as current mortgage holders (0.31% vs. 0.19%).
As fraud declines, market recovery brings new challenges
This decline in mortgage fraud comes as Canada’s housing market shows early signs of recovery.
According to Equifax, new mortgage originations surged 39% in Q4 2024, driven in large part by renewals and refinances, which accounted for more than half of all activity.
But while volumes are rising, affordability remains a serious challenge—especially for borrowers renewing at rates much higher than those secured during the pandemic.
At the same time, financial stress among mortgage holders is mounting. Delinquency rates hit record highs in Ontario and British Columbia, underscoring the pressure faced by many households despite the broader market rebound.
Primary drivers of mortgage fraud
Falsified financial documents continue to be a key source of concern in mortgage application fraud, according to Equifax.
“When we look at some of the reasons behind mortgage fraud, we see that falsified financials and income information is an ongoing major concern,” Prince explained.
Equifax’s latest findings highlight the types of fraud most commonly seen in mortgage applications—and who is most likely to commit them:
- Falsified financials accounted for 30.2% of mortgage fraud cases in Q4 2024, up from 28.2% in Q4 2023.
- Misrepresentation of financial information, where applicants submit fake pay stubs, employment letters, account statements, tax slips, or provide false down payment information, accounts for over 95% of fraudulent applications.
- Other falsified documents made up 23.3% of cases, followed by conflicting information (19.0%) and falsified income (14.4%).
“These findings reinforce our message that lenders need to focus attention on verifying financial documents,” Prince added.
Will lower rates continue to support mortgage growth?
Looking ahead, there’s optimism that falling interest rates will help fuel continued growth in the mortgage market through 2025.
However, the path forward may not be smooth for all borrowers. Many homeowners facing mortgage renewals could be hit with payment shocks, especially those who secured ultra-low rates during the pandemic.
As previously reported by Canadian Mortgage Trends, around 60% of outstanding mortgages are set to renew by the end of 2026, and about 60% of those renewals—or roughly 40% of all mortgages—are expected to face higher interest rates, according to research from the Bank of Canada. That’s left many households preparing for elevated costs, even as interest rates begin to decline.
“We do know that borrowers who are looking to renew now may be faced with some challenges as their payments could be higher at renewal,” Prince noted.
While easing interest rates and stable inflation are supporting renewed mortgage activity, external risks like U.S. tariffs could weigh on consumer confidence and economic growth. Should conditions worsen, some of the renewed credit demand could shift toward higher-risk borrowers, Equifax added.
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Last modified: March 31, 2025