Ontario’s mortgage delinquency rate has nearly doubled over the past year, as elevated borrowing costs continue to exert pressure on some homeowners, according to a recent report.
Equifax Canada’s credit report for the fourth quarter of 2024 indicates that Ontario’s mortgage delinquency rate, which reflects the proportion of mortgages in arrears, surged by 90.2 percent compared to the same quarter in 2023, reaching a recent peak of 0.22 percent.
Among all provinces, Ontario experienced the most significant increase in mortgage delinquency rates, far exceeding the rises seen in British Columbia (up 37.7 percent) and Quebec (up 41.2 percent).
Equifax reports that over 11,000 mortgages in Ontario recorded a missed payment in the final quarter of 2024, nearly three times the number reported two years prior in 2022.
Many first-time homebuyers or those renewing their mortgages may have secured low rates prior to the pandemic or in 2020. However, Equifax notes that the rise in interest rates has resulted in a higher average loan amount and balance for mortgage renewals in 2024 compared to the previous two years. Additionally, approximately one million mortgages set for renewal in 2025 are anticipated to be affected by the ongoing increase in interest rates.
Rebecca Oakes, vice president of advanced analytics at Equifax Canada, stated in a release accompanying the data, “Mortgage holders generally strive to maintain their payment schedules. The significant rise in missed payments indicates a more profound financial strain. Depending on the type of credit, missed payments have surged between 10 to 80 percent compared to levels prior to the pandemic.”
According to Equifax, approximately 25 percent of mortgage holders experienced an increase of over $150 in their monthly payments upon renewal in the fourth quarter of 2024. While Ontario appears to be performing worse than other provinces, total consumer debt across Canada has also risen compared to 2023, climbing by 4.6 percent to reach $2.56 trillion. Notably, credit card debt saw a significant increase of 7.8 percent in 2024. Additionally, Canadians are increasingly turning to non-bank auto loans, which have risen by 11.7 percent year-over-year.
The data further indicates that residents of Ontario faced challenges with various forms of debt in the latter months of 2024, as evidenced by a 46.1 percent rise in the 90-day delinquency rate for non-mortgage debt.
The report highlights that in Toronto, the delinquency rate for non-mortgage debts exceeding 90 days reached 2.06 percent, surpassing that of most major cities, which underscores the region’s distinct financial difficulties.
This data points to heightened financial pressure among Canadians, with potential for further strain if U.S. President Donald Trump implements a proposed 25 percent tariff on a majority of Canadian goods as early as March. The findings also reveal a financial disparity; while some borrowers are facing increased payments or accumulating more debt, others have managed to stabilize their financial situation by utilizing home equity lines of credit, according to Equifax.