The mortgage renewal shock many experts have been predicting appears to have arrived.
Mortgage delinquencies in Ontario have skyrocketed 50 per cent higher than pre-pandemic levels, and more than 11,000 mortgages in the province missed at least one payment in the fourth quarter of 2024, nearly three times the number seen in 2022, Equifax Canada said in its quarterly credit report.
“Mortgage holders will typically do everything they can to keep up with payments,” Equifax V-P of advanced analytics Rebecca Oakes said. “The fact that we’re seeing missed payments rise so sharply suggests deeper financial strain.”
Oakes said two main drivers of delinquency are the surge in home prices during the pandemic and the higher interest rates homeowners now face on renewal of their mortgages.
“While some consumers are doing better and seeing financial improvements from lower interest rates,” said Oakes, “financial pressures have intensified for some Canadians, as well as mortgage holders in certain regions, in particular in Ontario and British Columbia.”
When B.C. software engineer Pushkar bought a Surrey townhouse in August 2022, he expected interest rates would go up — but never imagined so fast.
At the time, he signed up for a variable-rate mortgage at 4.8 per cent with a fixed payment of $4,200 a month for his $950,000 home.
Within a few months, the rate rose above six per cent, and at one point in 2023, Pushkar found himself contributing only $400 to the principal, with the rest going toward interest.
Pushkar’s family (the Star has agreed to not use his last name due to the sensitive nature of his financial situation) made an extra payment of $1,500 each month throughout 2023 and most of 2024.
“We drastically cut down on the online shopping we do. We did not buy any clothes,” said the father of a one-year child, adding that they trimmed their monthly expenses by $800.
Still, Pushkar knows he has suffered a lot less than others.
Richard Goldhar, a licensed insolvency trustee, said many of his clients who are in the same boat have large car loans, single-income households and young children.
“The cost of daycare can sometimes outweigh the cost of the spouse working,” said Goldhar. “So they go to one income, but meanwhile, their costs of living are still very high.”
Goldhar said his first advice for people struggling to keep up with mortgage payments is to seek help from family.
“It’s very nerve-wracking at first,” he said, “but once you open the door, you realize so many people have noticed already, and they’re so happy you came and they will do what they can to help you.”
He also recommended contacting your mortgage lender to explain your situation, asking about any available deferral programs or interest relief options, and seeking budget counselling to manage expenses.
Ontario has also seen a sharp increase in the number of people falling behind on mortgage payments by 90 days or more, with that delinquency rate rising by 90 per cent year-over-year.
This spike far exceeds the rise in 90-day delinquencies seen in other provinces, including Quebec at 41.2 per cent and B.C. at 37.7 per cent.
However, what Oakes referred to as an “early warning sign” is the nonmortgage debt.
The 90-plus day nonmortgage balance delinquency rate in Ontario jumped 46.1 per cent from year-over-year, while the province’s overall nonmortgage delinquency rate rose 23.9 per cent, above the national average of 18 per cent.
At the end of 2024, total consumer debt in Canada hit $2.56 trillion, marking a 4.6 per cent increase from 2023, largely driven by nonbank car loans.
Following Fort McMurray and Edmonton, Toronto has the third-highest nonmortgage delinquency rate in the country at 2.06 per cent.
Oakes said that financial disparities are widening across Canada, with some borrowers — higher-income individuals and older people outside of high cost of living provinces — benefiting from lower interest rates while others struggle with mounting debt.
“In our mortgage data, we see the average loan amounts have risen quite significantly,” said Oakes. “And when we look at where the missed payments are really coming from, it’s on those higher balanced mortgages.”
In 2025, more than a million fixed-rate mortgages will come up for renewal, many of which were originally taken out when the Bank of Canada’s overnight rate was below one per cent but now stands at three per cent.
One in four mortgage holders faced an increase of more than $150 in their monthly payments at renewal in the fourth quarter of 2024, the report read.
“The added uncertainty of U.S. tariffs underscores the need for a balanced approach to debt, affordability, and trade,” said Oakes. “The coming year will be critical for Canada’s economic stability.”
