Mortgage delinquencies in Canada remain low overall, but severe delinquencies are rising as the market moves deeper into a major renewal cycle, new data from Equifax Canada shows.
Mortgage balances reached $2 trillion in Q4 2025, up 2.6% year over year, while mortgage originations rose 9% annually by account volume, Equifax said during its latest Consumer Credit Trends briefing.
At the same time, severe mortgage delinquencies — loans more than 90 days past due — are climbing. The overall delinquency rate remains low at 0.26%, but severe delinquencies rose 30% year over year by dollar value and nearly 15% by account count, suggesting stress may be starting to build beneath the surface.
“This suggests that while originations are coming back, the velocity of new defaults is accelerating,” said Tracy Allardyce, consultant in data and analytics at Equifax.
Economic uncertainty weighing on borrowing demand
The slower recovery in mortgage activity reflects a broader economic environment marked by weak confidence and lingering uncertainty, said Bill Johnston, senior vice-president and chief data and innovation officer at Equifax.
“If we’re being polite, the best thing we could say about 2025 is that it was a stock year,” Johnston said, noting that trade tensions and economic uncertainty have kept both businesses and consumers cautious.
That caution has translated directly into credit markets. Despite Bank of Canada rate cuts, the expected rebound in borrowing, particularly in mortgages and auto lending, has not materialized.
“We expected a fairly strong recovery both in auto and mortgage,” Johnston said. “That really hasn’t manifested itself the way we thought it was.”
At the same time, affordability pressures are widening the divide in the credit market. Higher-income households continue to hold the majority of excess savings accumulated during the pandemic, while a growing share of consumers are feeling increasingly stretched.
The top 20% of income earners now hold more than 60% of excess savings, Johnston said, leaving much of the population with far less financial flexibility.
“There’s a group of people who are doing really well, and then there’s a growing group that’s really being stretched by affordability.”
Mortgage stress concentrated in high-priced markets
Within the mortgage market, delinquency pressures remain highly concentrated in specific regions and loan segments.
Equifax said the increase in serious mortgage delinquencies is being driven primarily by larger loans above $800,000, with the biggest increases in Ontario, B.C. and Atlantic Canada.
Ontario in particular saw a notable rise, with the province’s delinquency rate climbing above 0.3%, reflecting growing strain in markets with the highest home prices.
“This regional concentration of risk highlights the vulnerability of markets with the highest price-to-income ratios,” Allardyce said.
Affordability pressures are also reshaping borrower behaviour. While first-time buyers remain active, growth in that segment is slowing. Mortgage originations among first-time buyers rose 14% year over year in Q4, down from 21% in the previous quarter.
The average loan amount for first-time buyers now stands at $441,000 nationally, with borrowers in Ontario and B.C. taking on balances roughly 20% above the national average.
Renewal wave expected to test borrower resilience
The biggest mortgage risk ahead lies in the massive renewal wave now moving through the market.
Equifax estimates that about 60% of outstanding mortgages will renew between 2025 and 2026, meaning many borrowers could still face payment increases despite stabilizing interest rates.
By the end of 2026, nearly one-quarter of renewing mortgage holders are expected to face higher payments as loans taken out during the pandemic-era low-rate environment reset at higher borrowing costs.
While most borrowers have managed the transition so far, lenders will be watching the impact of those payment shocks as the renewal cycle continues.
For now, Allardyce said the key takeaway is that stress is emerging gradually rather than all at once.
“We are currently navigating a complex mortgage landscape,” she said, citing rising defaults on higher balances alongside a stabilizing interest-rate environment.
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Last modified: March 16, 2026