Canadian mortgage delinquencies continued to rise sharply in Q1 2025, according to Equifax. While the rate remains historically low, it’s climbing fast. The trend was driven largely by Toronto, where delinquencies have hit one of the highest levels in decades, even as other major markets remain well below the national average.
Canadian Mortgage Delinquencies
A delinquent mortgage is a home loan that’s been caught smoking behind the school or engaged in things like minor shoplifting of a candy bar, etc.—you know? A delinquent. Just checking if you’re paying attention.
A delinquent mortgage in Canada is generally considered 90+ days past due, and the rate refers to the share of total mortgages that are 90+ days past due. While often seen as a sign of consumer distress, it’s really about market liquidity. In a hot market, owners who fall behind on payments can sell and sometimes even profit. Delinquencies surge only when home purchases stop, and since there’s always a buyer, it’s just a matter of price—rising delinquencies usually indicate overvaluation.
Canada’s low mortgage delinquency rate sounds reassuring—until you look closer. Industry comparisons to the US often skip over key differences in methodology. One example is the American delinquency rate is usually reported at 60+ days past due, while in Canada it’s 90 days. That extra month matters—a lot of loans recover or the odds of selling increase before that 90-day mark.
Another key difference is who reports that data. In Canada, higher-risk borrowers—like those who can’t get a loan or renewal at a major lender—often turn to private lenders. This fragmented industry plays a growing role in speculative credit, but many don’t report to Equifax (if any credit bureau at all). In contrast, US subprime and risky loans are typically issued by smaller, regulated lenders that do report. Canada’s fragmented system allows for underreporting of its higher-risk borrowers, while the US system is more complete.
Canada’s delinquency rate is generally lower and may be lower than the US—but there’s no apples-to-apples data to confirm. That’s why it’s more useful to track our historical trends. Comparing our economic downturn to the US might feel reassuring, but it doesn’t tell us much. After all, getting punched in the stomach is better than being kicked in the junk, but it still sucks in contrast to not being hit at all.
Got it? On to the data!
Canadian Mortgage Delinquencies Hit A 4-Year High, But Remain Historically Low
The Canadian mortgage delinquency rate: In percentage points.
Source: Equifax; CMHC; Better Dwelling.
Canadian mortgage delinquencies are rising, but remain well below crisis levels. The rate climbed 1 basis point (bp) to 0.22% in Q1 2025—up 4.76% from the previous quarter and 4 bps (22.2%) higher than last year. The Canadian mortgage delinquency rate is now at a 4-year high.
It’s part of a steady trend of rising delinquencies since record lows in Q4 2022. Since then, the rate has climbed 8 bps—an increase of 57.1%. The increase is aggressive, but the rate remains at 2021 levels.
Canadian mortgage delinquencies are rising, but still sit 7 bps below 2019—when things were “normal.” The trend is worth watching, as the climb has been very aggressive, though not yet alarming. Most of the stress appears concentrated in the country’s largest market—Toronto, where the delinquency rate has hit the highest level in over a decade. That contrasts with cities like Montreal and Vancouver, where rates are rising but remain below the national average.
Interesting point about 60 vs 90 DPD that’ve never considered. First Big Six I checked for 60 dpd shows a similar rate to the US.
I guess the question is does the US move in to close on a home at 60 days or do they wait like Canada for 120 days? I know in Canada the mortgage delinquency rate at 90s DPD doesn’t mean the lender will move in but generally just start putting cash aside to mitigate any interruption.
The usa tends to be slower than canada. Remeber in the usa, the orig8nator of a mortgage is rarely the person who administers the mortgage.
The us rules on this stuff are also more consuner freindly than canada which is a bankcracy.
Then there is the issue that the usa allows mortgagrs yo be deducfible, and any gain is often taxable. So rushing to foreclise isnt beneficial
A lot of rural properties are also falling behind out here (Maritimes). Mostly people who moved to the country then had to go back to the office, and are now trying to carry the cost of two places.
serious question: How are people even defaulting in this environment? My understanding is every bank has been ordered to bend backwards to prevent this— extending amortizations to infinity and recognizing “purchase” price as the value for mortgages, etc. It sounds like you legitimately have to try to default and refuse to talk to your lender for this to happen.
hence why aggregate remains low while rate of change rapidly increasing.
Yeah canadian banks are far worse than most us lenders. The laws here are far more bank freindly, and telling them to be nice isnt working.
Whatever the problem is with the big-5, it is likely many, many, more times worse with the secondary mkt, mics, private investors , on which strangely, we don’t seem to have any data at all..
Ed
Falling prices mean more delinquencies. If you cannot pay the mortgage and your house value is dropping and your underwater, more and more people will walk away and stop paying. If your broke you get 9 to 12 months free rent and a lot of current or previous years property tax can avoid having to pay, before they throw you out.
Its only just starting.
Here to say thanks for the 80s references today. Got a real LOL out of it.
The secondary market often starts at 12%, you fall behind very quickly and they wont be as patient as the banks.
The report of only 24 condos sold in Toronto in May is unbelievable, I cant imagine the hurt, especially if the unit is sitting vacant. I worry with my little rental properties $160K 1.9% mortgage and rent over $2100 coming in. No condo fees, low tax and the tenants pay all the utilities… I thought many times of buying a condo, but those high monthly fees always turn me off. Right now Id like to pick up a basic house with Basement suite in Toronto, but the HUGE land transfer tax (around $50k on $900K turn me off)…
Those that bought at the peak in 2021/2022 were told by Tiff that interest rates would stay low for an extended time. Following their dream, many buyers jumped in and bought as much house as they could. Only to have the rug pulled. Their life savings invested..their dream turned into a nightmare. While others may delight at the losses hoping for huge price drops and hope for home ownership themselves..this could’ve been you. Any distressed homes unlikely will make it to market ,numbered companies in the know will swoop in and buy them up for rentals. A PMs former company , did just that in USA to the tune of $950 million. Moral of the story: Never trust any politician to any extent, and never take medical advice from them or those given an honorary doctorate.