A recent report reveals that Canadians are facing challenges in meeting their mortgage obligations, particularly in the expensive housing markets of Ontario and British Columbia. According to Equifax Canada’s Market Pulse report released on Tuesday, mortgage delinquency balances have surged by 32% nationwide in the first quarter compared to the same period last year, with Ontario and British Columbia experiencing increases of 52% and 36%, respectively.
Equifax Canada noted that the rise in missed payments indicates severe financial strain in these high-priced markets. Homeowners who have missed payments saw their average delinquent non-mortgage balances rise to $54,000, a 4.6% increase from a year ago. Additionally, the average delinquent mortgage balance climbed by 13.2% to $355,500.
The report also highlighted an 11% increase in homeowner insolvencies compared to the previous quarter of 2025, with insolvent mortgage holders carrying an average non-mortgage debt of $82,400. Over 90% of these individuals opted for consumer proposals over bankruptcy.
Despite the uptick in delinquency balances, the rate of missed mortgage payments remains low, with the 90-plus-day volume delinquency rate standing at 0.22%, below pre-pandemic levels. Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada, emphasized that while mortgage mispayments constitute a small percentage, they serve as an indicator of underlying financial stress.
One contributing factor to the challenges faced by homeowners is the impact of higher interest rates. Oakes explained that as interest rates have risen, consumers with mortgages have felt the effects, especially during mortgage renewals at higher rates over the past two years. Notably, provinces like Quebec and Saskatchewan have seen a decrease in missed payment levels compared to Ontario and British Columbia.
Looking ahead, Oakes warned of a potential increase in delinquencies as mortgages come up for renewal at higher rates. While she expressed hope for stabilization, concerns remain about the additional financial pressure that could arise if interest rates increase again.
The report underscored that overall insolvency volumes have reached their highest levels since 2009, signaling ongoing systemic risks despite Canadians’ efforts to stay financially disciplined amid economic challenges. The first quarter of 2026 saw an 18.8% year-over-year increase in insolvency volumes.
Ron Butler, Principal Broker at Butler Mortgage and host of the Angry Mortgage podcast, attributed the surge in delinquencies to a “perfect storm” of factors, including declining home values, higher interest rates, and a challenging job market. Butler highlighted that the decline in home values has eroded the equity homeowners once relied on during financial difficulties.
Additionally, Butler pointed out that job losses and reduced earnings have exacerbated mortgage delinquencies, particularly among housing investors. He referenced Brampton, Ont., as a location where delinquency rates are high, driven by investors who purchased properties to accommodate international students. As the number of students declined, these investors faced financial troubles.
Despite the rise in delinquencies, Butler reassured that financial institutions are not alarmed, as the current rates are manageable and do not pose significant risks of default for banks.
