Canadian Mortgage Delinquencies Surge, Up 135% In Ontario: Equifax

Canadian households are struggling to manage their astronomical debt loans. That’s the warning from credit rating agency Equifax Canada, who noted a surge in both mortgage and non-mortgage credit delinquencies in Q4 2023. The issue is emphasized in pricey BC and Ontario, especially when it comes to young adults. 

Canadian Mortgage Delinquency Rates Are Climbing 

Canadians are experiencing significant hurdles repaying their supersized debts. Mortgage delinquencies climbed 52.3% to 0.14% in Q4 2023. Non-mortgage delinquencies saw the rate climb 28.9% to 1.3% over the same period. While the growth is higher, the rate is largely in-line with historical data. 

BC & Ontario Mortgage Delinquencies Greater Than Pre-Pandemic

Two provinces are proving to be an exception—BC and Ontario. In BC, the delinquency rate climbed 62% higher for mortgages, and 30% higher for non-mortgage credit. In Ontario, the mortgage delinquency rate climbed a whopping 135%, while the non-mortgage rate was up 34.8% over the same period. 

Equifax didn’t specify the final rate for the two provinces, just the growth. However, they did specify that both provinces are now above pre-pandemic levels.   

Canadians Are Experiencing Pain From Housing Debt

“As we assess the unfolding dynamics in the housing market, it’s evident that upcoming mortgage renewals will be pivotal for many homeowners,” said Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada.

Adding, “With the prospect of renewing mortgages at substantially higher rates than current ones, consumers who locked in historically low interest rates in 2020 — particularly those with substantial loan amounts — may face challenges in sustaining their payments.”

It’s also worth noting that mortgages obtained in 2020 will climb substantially on renewal by next year. However, most homes were purchased before 2020 at a much lower value, with most homeowners having accrued substantial equity. They didn’t explicitly highlight this, but it’s reflected in the payment stress seen on younger homeowners (who are more likely to have been recent buyers). 

“Missed payment levels in Ontario and BC are primarily being driven by younger homeowners (defined as 36 years of age and under) where both balance and account delinquency rates are now higher than in 2019,” explained Equifax while discussing a surge in young mortgage borrowers missing payments on other credit products.