Ontario's record-setting mortgage delinquencies ‘enormously concerning'

Toronto Star

6 days ago

More Ontarians are missing mortgage payments than at any time since Equifax started tracking them in 2012, according to new data from the credit agency.
'Delinquencies are really still rising on the mortgage side,' said Rebecca Oakes, vice-president of advanced analytics at Equifax Canada.
'We're still very concerned about those.'
Ontario's 90-plus day mortgage delinquency rate rose 71.5 per cent since the first quarter of 2024, to 0.24 per cent from 0.14 per cent.
Alison Kemper, an associate professor at Toronto Metropolitan University's Ted Rogers School of Management, called this 'enormously concerning.'
There's not enough missing middle housing in between larger detached homes and small condo units, prices are still very high, and what is being build is aimed at investors, she added. So people end up taking on huge debts to find a decent place to live.
'The first thing you make sure you do in life is to pay your mortgage, but people aren't doing that, because the whole system is so broken now,' she said.
Nationally the mortgage delinquency rate is at the highest level since 2016-2017.
The mortgage stress test introduced starting in 2016 brought down missed payments, but now those numbers are creeping back up again despite the fact it's still in place, Oakes said.
This is because of all the mortgages opened during the pandemic with high balances and low rates.
'Now you're seeing people coming off those low rates. And it's a challenge,' Oakes said.
She added Ontario is likely dealing with more missed payments because of high home prices, particularly in the GTA, and a rising unemployment rate.
Due to its close ties to the U.S., the province is also more vulnerable to economic uncertainty around the ongoing trade war.
The mortgage delinquency rate is always a relatively small number, she said, because mortgage payments are typically the last thing to go when Canadians face financial hurdles.
They will miss other payments on things like credit cards and cars before putting their homes at risk.
Nationally, missed payments continued to rise on credit cards, and more than 1.4 million consumers (1 in 22) missed at least one credit payment during the first quarter of the year.
New mortgage originations were up 66 per cent in the first quarter of 2025 compared to the same time last year in Ontario, and about 58 per cent nationally.
But Oakes said this reflects people shopping around for better rates, as part of the 'Great Renewal' of pandemic era mortgages.
More than a million mortgages are set to renew in Canada this year and borrowers are facing much higher monthly payments.
Victor Tran, a RATESDOTCA mortgage and real estate expert, said it's worth it to look for a better rate as even a small difference means you'll save money.
With sales down, banks and brokers are all competing for the best renewal rates, even offering incentives like cash back or credit card points.
'It's almost a race to the bottom,' he said.
Interest rates are down somewhat but mortgage rates are also tied to the bond market, which has been impacted by the economic uncertainty surrounding the U.S. Trump administration and the ongoing trade war.
As bond yields increase, fixed rates will follow suit, Tran said. That's why it's a good move to lock in a pre-approval, whether you're renewing, or planning on buying a home.
As for those looking to purchase their first home, the picture is still not exactly rosy, Oakes said.
New mortgages for first-time buyers in Ontario were up about 38 per cent in the first quarter of 2025, but that's more of a recovery from losses over the last two years.
'You know, 12 months ago, it was at very low levels. So it's up, but kind of from a low point,' said Oakes.
'Yes, the interest rates coming down means payments are coming down a bit. But actually the average loan size is still increasing. So it's not great if you're first-time home buyers still at all.'