Toronto Mortgage Delinquency Rate Hits A 9 Year High 

Toronto real estate just got another sign that it entered one of its roughest markets ever. Equifax data shows the Greater Toronto mortgage delinquency rate climbed again in Q2 2024. Just two years after hitting a record low, the rate is now climbing at one of the most aggressive paces in history, hitting a 9 year high in the latest data. 

Mortgage Delinquency Rates 

The mortgage delinquency rate is the share of total mortgages at least 90 days past due (DPD). It’s one of the most discussed and important economic indicators but also one of the most misunderstood. 

Most people think a rising delinquency rate means households are struggling. Not necessarily the case since most people will try to sell their property before the mortgage becomes delinquent. In a hot market, a distressed seller can sell the property and often make money before the mortgage turns delinquent. 

Mortgage borrowers only tend to default when they can’t dispose of the property in a timely fashion. In short, it’s less of a sign of consumer health and more a sign of market liquidity. 

Toronto Mortgage Delinquency Rate Hit The Highest Level Since 2015

The share of Greater Toronto mortgages considered delinquent (90 days past due), as reported to Equifax.

Source: Equifax; CMHC; Better Dwelling. 

Greater Toronto mortgage delinquencies have been increasing steadily over the past few years. The rate climbed 14.3% (+0.02 points) to 0.16% of mortgages in Q2 2024, doubling (+0.08 points) the same quarter a year before. The rise has been fairly steady over the past few months, and making up for lost time. 

The rise is one of the sharpest in history, and shows the sudden change. Since hitting a record low in 2022, its climbed 166% to the highest rate since 2015. It pales compared to the previous months, and that’s not exactly when dinosaurs roamed the earth. However, it predates Toronto’s recent real estate boom and the rate is climbing, not falling as it was back then. 

Most surprising is the fact this increase is occurring in the current environment. Policymakers have gone to unusually extreme lengths to mitigate rising delinquencies. They’ve asked lenders to do virtually anything to prevent mortgages from falling into arrears, such as extending the mortgage to create multi-generational amortizations. Even with these measures, the rate is rising sharply across Greater Toronto—much more sharply than the national average.

20 Comments

COMMENT POLICY:

We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Reply
    Sid Goldstein 1 week ago

    Toronto’s not coming back for a while. The rise in crime and emptying of commercial districts is typical of a real estate crash, which precedes a 1o+ year correction period.

    The worst part being that prices have yet to come down, so it can’t even begin the recovery phase since price inefficiency is what causes these negative pressures.

  • Reply
    TO Realtor 1 week ago

    Need to flush out all of the speculators so the market can return to healthy growth. Toronto was doing great before all of these boneheads were elected during the pandemic and then killed any real growth and life in this city.

    • Reply
      Itchy Bear 1 week ago

      Doug and Justin were both in power pre-pandemic…and it isn’t like any other parties have been offering radically different policies towards real estate in a dogs age.

      • Reply
        Mark Hope 6 days ago

        Speculators/ investors/ guick buck opportunists…I shed but not one tear for you!!
        You and braindead Trudope’s immigration policies triggered this mess. Record low interest rates fueled the cheap money frenzy by thinking cheap money is here to stay forever is thoughtless and reckless dillusional thinking!!
        They thought this was one hell of a cheap money party that would never end….yahoo….spend spend spend!! Well; that party ended and now you are stuck with the bill!!
        You drank too much and now you suffer with debt hangover! You are financially irresponsible; have no clue what saving for a rainy day means!! I hope to hell all of you file for personal bankruptcy to teach you a valuable lesson in fiscal financial management responsibility and debt management. No tears for you either!!!

    • Reply
      Yoroshiku 1 week ago

      The speculators did not start up when the pandemic hit. I know a number of people who have spent 20 years speculating on homes in the GTA. I’m sure you do too. Gov’t and tax policies encourage it.

  • Reply
    MarketWatcher 1 week ago

    It’s up from an insanely low delinquency rate. It’s still insanely low relative to most if not all other countries. Only 0.15% of mortgage borrowers are delinquent.

  • Reply
    Massive Guy 1 week ago

    Drop interest rates to 0% to save house prices. Please do it now!
    In other news, CAD > 0.50USD

  • Reply
    [email protected] 1 week ago

    If it does not make financial sense it is not real and never will be. When new luxury American homes with backyards are 400K or less you know Canada is long overdue for a complete collapse of housing markets from coast to coast. See youtube, zillow, redfin and others and see for yourselves.

  • Reply
    Frani 1 week ago

    Seems as though the Money laundering was overlooked especially in BC and TO. Canada was known to have lax rules and was an easy play driving up prices,outbidding regular families looking for a home. Not to mention int’l students going to U of T or any facility who came for education had pooled $$ from their respective families back home and as opposed yo renting ,bought the home and shared while in school . When school ended they went home and the families hung onto their investment sometimes renting the property to other new students sometimes not. Thus the empty homes tax. All the while money laundering and foreign investment kept driving up prices while wages were nowhere near keeping up with inflation. It was a recipe for disaster.

    > AI Overview

    +1
    The Canadian federal government’s foreign investment real estate policy is a ban on non-Canadians purchasing residential property in Canada:
    Duration
    The ban was initially set to begin on January 1, 2023 and end on December 31, 2024. However, on February 4, 2024, the government announced that the ban would be extended to January 1, 2027.
    Purpose
    The ban was implemented to address concerns that Canadian buyers were being priced out of the local housing market. The government’s goal is to ensure that homes are used as residences for Canadian families, rather than becoming speculative financial assets.

  • Reply
    abe heuchert 1 week ago

    A bunch of 1/2 point BOC are needed – and fast to try and save this market. Thousands of dog crate condos will be owned by the banks. Maybe they can start knocking out walls and combining 2 of these to make one decent unit. Nobody wants to live like this in a kennel so the market value of these dog crate is very little.

  • Reply
    abe heuchert 1 week ago

    A bunch of 1/2 point BOC rate reductions are needed – and fast to try and save this market. Thousands of dog crate condos will be owned by the banks. Maybe they can start knocking out walls and combining 2 of these to make one decent unit. Nobody wants to live like this in a kennel so the market value of these dog crate is very little.

  • Reply
    Mark Bayly 1 week ago

    Wages need to increase by 60 per cent in order for people to buy houses . With the two million extra people coming in every year courtesy of Trudeau labour is increasing much faster than available jobs . And wages are flat The trouble is only starting

    • Reply
      Ike Heska 18 hours ago

      Taxes have to come down along with need for near zero interest rates to make housing affordable. If this were done combined with a neutral population growth policy through immigration, we would all be better off. Population growth should be encouraged through new births instead. Asset values would remain high but debt service would be more affordable. Debt service on government debt would become more manageable. Banks balance sheets would remain healthy thus avoiding imminent monetary collapse of the banking system. Any other form of strong medicine would make the dirty thirties look like boom times. If Trump and his tariffs take place and continue – all bets are off the table. Canada as it is now is doomed and will break up – Alberta and Sask will be the first to go and become part of the USA. Proposed export taxes by Trudeau if brought into law will be the end of Confederation.

  • Reply
    Ken 1 week ago

    Time to stop propping up the market and let it cycle as it should. Yes people will be hurt by it just like other recessions, but things always return.

  • Reply
    Mike 1 week ago

    It would be awesome to see data for Ontario vs Canada I’m curious to see how far Toronto is deviating from the rest of the country and province.

  • Reply
    Ron Bruce 7 days ago

    Banks and financial institutions are supposed to follow KYC rules before issuing a mortgage. Under these rules, working with individuals with an uninterruptible income and pension ( aka government employee) is better than working with the private sector, which competes globally. Therefore, there should be fewer delinquencies.

    So who are the idiots, the financial institutions or the idiots who thought his/her income would always carry the day? Do not think financial institutions work on your behalf (i.e. TD Bank was fined 4 $billion for laundering money). They’re using clients’ deposits to pay off their debt over time. And no executive went to jail to face up to ten years in prison.

  • Reply
    Grim Reaper 7 days ago

    Unbelievably, there are still condominiums being built in Toronto where demand for them has virtually disappeared.

    • Reply
      Ike Heska and 18 hours ago

      Only ones already underway. No new projects on the horizon. Period. Dog crate condos will be cheap.

  • Reply
    don smith 3 days ago

    Party is just getting started. Rising bond rates all around the world will soon force Canada bond rates to rise significantly Canada Bonds are currently 140 points lower than US, Uk Aus and Nz. Mortgage rates are about to shoot back up probably by 1-2 percent if world bond rates stop where they are today. Expect 6% rates soon might be a lot higher than that. Delinquency rates so far are minimal and have little affect on the housing market. That might change real fast.

Leave a Reply

Your email address will not be published. Required fields are marked *