Canadian banks aren’t just seeing delinquencies rise—they’re losing market share. Canadian Bankers Association (CBA) data shows the arrears rate was unchanged in March. Delinquent mortgages stalled at one of the highest levels in a decade, after doubling from 2022 lows. However, the big story last month was the drop in the number of mortgages held by banks, now approaching a 6-year low.
Canadian Mortgage Arrears Rate Remains At 9-Year High
The arrears rate of residential mortgages at Canadian banks.
Source: CBA; Better Dwelling.
The national arrears rate was largely unchanged at 0.28% in March, up 6 basis points (bps) from last year. The rate is the highest since February 2017, and double the pandemic lows last seen in mid-2022. That means arrears outpaced total mortgages by 18% over the past year, and have averaged roughly double the pace since 2022. It’s easy to mistake that monthly stall as a sign of stabilization, but a breakdown reveals that’s not the case.
Canadian Banks Haven’t Seen Delinquencies Like This In 10 Years
The total number of mortgages at least 90 days past due at Canadian banks.
Source: CBA; Better Dwelling.
Mortgages in arrears were virtually unchanged at 13.7k in March, 28 fewer than in February. Not 28 hundred or thousand, but literally 28 fewer delinquencies. The count has climbed 24.7% since last year, and has almost doubled from August 2022’s record lows. Since February 2026 had the most arrears since January 2014, March was just over two dozen arrears below a 12-year high. In any case, the decline is more a rounding error than a sign of market stabilization.
Canadian Banks Hold Fewest Mortgages Since 2020
The number of mortgages held by Canadian banks.
Source: CBA; Better Dwelling.
Elevated arrears aren’t the only problem banks are facing. They’re also holding fewer mortgages. Total mortgages fell 0.13% (-6.64k) to 4.93 million in March, down 1.07% (-53.34k) from last year. Since hitting a record high in June 2022, the total mortgage count has fallen 3.62% (-185.4k). Banks usually dominate the mortgage market, making this decline especially unusual. They’re now holding the fewest mortgages since October 2020, approaching a 6-year low.
At first glance, it looks like there may have been some signs of stabilization in the mortgage market. A dive into the data shows the arrears front hasn’t improved, while total mortgage volume is falling. Banks are holding fewer mortgages, amplifying the pain of each delinquency.
Are banks holding fewer mortgages because Canadians are increasingly turning towards the “shadow” banking system .. private credit lenders? The rates are better and the oversight is less stringent. Many Canadians need a little help qualifying for mortgage renewals on their own homes. The current economic environment is poor (income may be lower or unsubstantiated), valuations are low (lower %age equity raises the rate), additional credit is being used to meet monthly expenses. We should be happy that private credit lenders are willing to finance under these conditions. The real estate outlook would be much worse if these owners were undergoing forced sales from lack of ability to renew mortgages.
The worst is yet to come Household debt the third highest in the world
Well of course, after 22 years of increasingly pumping mortgages, from a stable avg ratio of 30-40% of GDP pre-2000 to the irresponsible 100% / GDP reached in 2022, they don’t want exposure to the house of cards economy they structurally weakened as they scaled their book from 60/40 business/ household loan ratio in the 1980s to 73% mortgage lending biz, amounting to a boiler room of flipping mortgages to CDNs as they bought each others house for a higher and higher price. To put the irresponsibility in context it was US 72% mortgage debt/GDP that catalyzed the GFC yet despite this glaring warning sign the banks, BOC, and CHMC collectively blew right by it. Noting these unhealthy ratios, Peter Routledge, head of the Office of the Superintendent of Financial Institutions, said in Sept 2025 he now wants banks to pivot more towards commercial loans. Bit late mate now the horse has bolted. Anyone with illusions this was accidental take note it also happened accidentally the same in UK, Aus, and NZ over the same coincidental period. Wealth creation they called it, not produced or earned in an real expanding economy just credited in a fake inflated economy that wont be able to maintain the inflated price now they’ve rug pulled the credit amidst tariffed higher price, oil….
OK but WHY ?
Is it;
1) Fewer people applying for Mortgages?
2) A wave of boomers paying off their mortgage just prior to retirement
3) Cash rich buyers not needed a mortgage, I agree unlikely unless money laundering or offshore dark money
4) Banks declining renewals, which I think is the implication, but I don’t see a direct link in the article
5) Population decline? so we don’t need as many houses and therefore mortgages… also not hugely likely..
6) Homeowners of a certain demographic bailing out on their property and high tailing it back to their home country before the bill comes due.. then the property going Power of Sale… Two properties on my street fit that description.. so this might be bigger than we think..
7) other?
Mortgage debt is growing, just not at the banks.
The long story short is Big Six banks sell non-performing loans or people chronically late on payments to B lenders, who then manage the risk. Borrowers just get told they’re now banking with x bank.