he anticipated mortgage renewal shock that many experts have warned about seems to be taking hold. According to credit agency Equifax more than 11,000 mortgages in the province of Ontario missed at least one payment in the fourth quarter of 2024, or up 0.22% from 0.19% in the third quarter and 0.12% in the same period of 2023. Nearly three times the number seen in 2022.
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 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. Even though the Bank of Canada has aggressively cut interest rates over the past seven months, the data suggests that borrowing costs are overwhelming homeowners who are still facing higher rates upon renewal than they had when they took out mortgages several years ago.
“Our numbers are telling us that there are more consumers struggling,” said Rebecca Oakes, vice-president of advanced analytics at Equifax Canada. “We are not seeing delinquency rates slowing.”
The average balance for a new mortgage in Ontario was $434,744 at the end of last year. The national average, including renewals, was $344,928.
“Mortgage holders will typically do everything they can to keep up with payments,” Rebecca Oakes said. “The fact that we’re seeing missed payments rise so sharply suggests deeper financial strain.”
“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.”
The cost of daycare can sometimes outweigh the cost of the spouse working, so they go to one income, but meanwhile, their costs of living are still very high.
The first advice for people struggling to keep up with mortgage payments is to seek help from family if they can.
Another recommendation is to contact your mortgage lender to explain your situation, asking about any available deferral programs or interest relief options, and seeking budget counselling to manage expenses.
Another early warning sign is the nonmortgage debt – (the total balance of a consumer’s loans and lines of credit when their first and second mortgages are removed from consideration).
The 90-plus day non-mortgage balance delinquency rate in Ontario jumped 46.1 per cent year-over-year, a delinquency rate 23.9 per cent above the national average of 18 per cent.
Following Fort McMurray and Edmonton, Toronto has the third-highest nonmortgage delinquency rate in the country.
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.
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.
The added uncertainty of U.S. tariffs underscores the need for a balanced approach to debt, affordability, and trade. The coming year will be critical for Canada’s economic stability.
Heading into 2025, mortgage-holders could face the added stress of tariffs imposed by the US, even if the threat of which could have adverse effects on the Canadian economy. Of course, homeowners could benefit from the Bank of Canada responding to tariffs with further interest rate cuts, but this silver lining would be accompanied by the very blows that necessitate it, such as decreased investment and job loss.