Canadian homeowners are increasingly struggling to keep up with their mortgages, especially in high-priced Ontario and British Columbia markets, as higher interest rates make it harder for them to service their debt when they renew their loans.
Equifax Canada’s Market Pulse report, published Tuesday, said mortgage delinquency balances were up 32 per cent 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.
In Ontario, the delinquency rate on total mortgages outstanding was 0.36 per cent in the first quarter of this year, that is 52 per cent higher than in the same period last year.
In B.C., the delinquency rate was 0.25 per cent in the first three months of this year, a 36-per-cent increase over the first quarter of last year.
Homeowners in those two provinces shoulder a heavier debt burden given that their average mortgage size is larger than those in the rest of the country. And as their mortgages have come up for renewal, they have been faced with a steeper increase in payments.
For homeowners who have missed a payment, their average delinquent non-mortgage balance reached $54,000 in the first quarter, a 4.6 per cent increase compared with a year ago. The average balance of their delinquent mortgages also climbed 13.2 per cent to $355,500.
Homeowner insolvencies were up 11 per cent 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 per cent of those individuals chose consumer proposals (a deal that is put in place with your creditors to repay a percentage of your total amount of debt, in exchange for debt forgiveness for the remainder) 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 per cent, which is below pre-pandemic levels.
“Overall, when you look at mortgage miss payments, it is quite a small percentage, because consumers generally will try and protect their mortgage as long as possible,” Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, said in an interview.
Ms. Oakes said it was not just the higher mortgage rates that have hurt homeowners. She said the rise in unemployment in the country has also contributed to the rise in delinquencies as well as insolvencies.
Overall, the number of Canadians filing for insolvencies has increased to its highest level since the 2009 global financial crisis.
In the first quarter, there were 4,512 homeowners with a mortgage who filed for insolvency, according to Equifax. That was an 18.3-per-cent increase over the same period in 2025.
In comparison, there were 32,609 Canadians without a mortgage who filed for insolvency in the first three months of the year. That was a 7.2-per-cent increase over the same period last year.
“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 and will that add some additional financial pressure into the ecosystem.
A combination of factors has created the perfect conditions for rising delinquencies. One of the biggest drivers has been the drop in home values over the past several years.
From roughly 2009 through 2023, homeowners facing affordability pressures or periods of unemployment could often tap into their home equity for support. That option has largely disappeared. Many people who purchased homes between 2020 and 2022 in Ontario are now seeing properties worth significantly less than what they originally paid.
Even with the increase in delinquencies, financial institutions are not currently alarmed. While the upward trend has been notable, delinquency and default levels still remain manageable for the major banks.
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