Canada's national mortgage delinquency rate has experienced its first decrease in three years, according to the Canada Mortgage and Housing Corporation (CMHC). While this marks a positive national trend, some regions, notably Ontario and British Columbia, continue to see an upward movement in overdue mortgage payments.
Key Takeaways
- The national mortgage delinquency rate fell to 0.22% in the second quarter from 0.23% in the first quarter.
- This is the first decline in three years, following a steady increase since 2022.
- Improvements were noted in Atlantic Canada, Quebec, and the Prairie provinces.
- Ontario and British Columbia, particularly Toronto, are still experiencing rising delinquencies.
- A significant number of mortgage renewals at higher rates are anticipated in the coming years.
National Trend Reverses
The CMHC announced that the percentage of homeowners more than 90 days behind on their mortgage payments has dipped to 0.22% in the second quarter of the year, down from 0.23% in the preceding quarter. This marks a significant shift after a period of gradual increase, which saw the rate climb from 0.14% in 2022. This rise was largely attributed to homeowners renewing their mortgages at substantially higher interest rates.
Regional Divergence
The national improvement is attributed to better repayment trends observed in Atlantic Canada, Quebec, and the Prairie provinces. However, the situation is different in Ontario and British Columbia. In Ontario, delinquencies have increased, with Toronto alone seeing a 60% year-over-year rise in its delinquency rate to 0.24% in the second quarter. This regional disparity highlights ongoing economic pressures in certain housing markets.
Future Outlook and Rate Hikes
Despite the recent national decline, the CMHC cautions that a substantial wave of mortgage renewals at higher rates is still on the horizon. Over 750,000 homeowners are expected to renew in the latter half of this year, with another 1.15 million facing renewals in 2026. For context, the average rate on a five-year fixed-rate uninsured mortgage has risen from 2.36% in July 2020 to 3.95% in July of the current year, indicating a significant increase in borrowing costs for many Canadians.
