However, much of that growth is tied to renewals and refinancing, which account for more than half of new originations, according to Rebecca Oakes, Vice-President of Advanced Analytics at Equifax Canada.
Equifax estimates that more than one million fixed-rate mortgages are set to renew in 2025, adding pressure to an already strained market.
Additionally, mortgage defaults continued to climb in late 2024, with overall balances past due rising 43% year-over-year. Equifax data also shows that the rate of mortgages overdue by 90+ days increased from 0.14% in Q4 2023 to 0.20% in Q4 2024, now exceeding pre-pandemic levels.
“This is being driven by higher interest rates and higher payments for consumers,” according to Oakes.
Mortgage market recovery slowed by rising affordability pressures
Ontario and British Columbia in particular are seeing delinquency rates reach new highs as homeowners struggle to keep up with rising payments.
In Q4, more than 10% of renewals in both provinces saw average monthly payment increases of $500 or more, putting additional financial strain on borrowers already managing high mortgage balances.
With household budgets tightening, more homeowners are falling behind on payments, driving delinquency rates upward.
While lower interest rates are expected to provide some relief, Equifax cautions that the full impact won’t be felt until mid-2025.
“In regards to interest rates, yes they’ve come down but just keep in mind that there’s a lag impact in terms of those rates helping to slow down the overall mortgage delinquency rate,” said Kathy Catsiliras VP, Analytical Consulting at Equifax Canada.
In the meantime, many borrowers will be facing payment shocks, especially those renewing fixed-rate mortgages from 2020 when interest rates were significantly lower. These homeowners are now transitioning to much higher rates, leading to substantial jumps in their monthly payments.
Equifax also noted a rise in lender switching throughout 2024, with 29% of borrowers choosing to move to a new lender—up from 26% in 2019. The increase is partly attributed due to OSFI guideline changes that now allow borrowers to switch lenders without undergoing a stress test.
Credit card delinquency rising among younger Canadians
Meanwhile, Equifax data shows that credit card spending increased by 2.2% year-over-year by the end of Q4 2024.
This marks the highest surge in credit card transactions during the month of December since 2020, likely due in part to the federal tax break that came during the holidays.
“Spending levels have remained elevated since the pandemic,” says Swarnima Pandey, Analytics Insights Manager at Equifax Canada. “Even when we account for inflation, it’s clear that consumers have been spending more in recent years.”
In terms of consumer spending, Sean McCormick, Vice President of Business Development at Moneris Data Services, reported that average grocery transactions are trending flat despite sustained inflation.
“The story here is that consumers have adapted. Consumers have a budget, and they only have so much money to spend on groceries,” McCormick said.
However, the overall credit card market is showing signs of strain, as the divide between those paying off their balances in full and those falling behind on payments continues to grow.
Younger consumers are struggling more to keep up with credit card payments, while older generations are managing their debt more effectively, according to Equifax.
“We’re clearly seeing a generational divide in credit card payments,” said Pandey. She notes that older borrowers with Home Equity Lines of Credit (HELOCs) are faring better, while younger consumers are increasingly making only minimum payments, contributing to rising delinquency rates.
Equifax reports that credit card delinquency rates have surged 16.5% year over year, forcing lenders into a more cautious approach since the end of last year.
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credit cards credit trends delinquencies equifax Canada Kathy Catsiliras Market Pulse consumer credit trends mortgage defaults mortgage trends rebecca oakes Sean McCormick Swarnima Pandey
Last modified: March 13, 2025