The number of Canadians missing mortgage payments is growing but remains below historical norms, according to new data from Canada’s housing agency, suggesting that the country is weathering a wave of pandemic-era mortgage renewals better than expected.

Tania Bourassa-Ochoa, deputy chief economist at the Canada Mortgage and Housing Corp., warned that the mortgage arrears rate – the share of mortgage consumers who have missed payments for 90 days or more – is expected to worsen in 2026, especially in the country’s most expensive markets of Toronto and Vancouver.

Data from CMHC show the national rate of delinquencies rose by seven basis points to 0.22 per cent between 2023 and 2025. It’s a notable increase but doesn’t amount to the kind of widespread wave of delinquencies that some economists predicted. (There are 100 basis points in a percentage point.)

“Arrears are increasing but not at the speed we anticipated previously,” Ms. Bourassa-Ochoa said.

“It’s relatively good news in a sense that the situation is not as bad as it could have been.”

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Roughly 1.5 million households have renewed mortgages over the past year from ultralow rates during the pandemic, and another million are expected to renew in 2026.

Some economists had predicted this period could be a “ticking time bomb” in which drastically higher interest rates would leave Canadians who purchased homes during the pandemic housing market frenzy unable to pay their mortgage.

Ms. Bourassa-Ochoa said Canadians renewing their mortgages have relied on stretching their amortization periods – often to terms longer than 25 years – to help lower monthly payments and avoid the shock from higher interest rates.

TD economist Maria Solovieva said the length of average mortgage amortizations have grown by 16 months from prepandemic levels, according to an analysis of debt-service ratios.

“Banks and Canadian households were fairly prepared for this renewal wave and were proactively making those changes,” Mr. Soloveiva said.

She said strong wage gains in 2024 also helped cushion the blow of higher mortgage payments for some households.

Vancouver and Toronto have experienced the largest increases in mortgage arrears, Ms. Bourassa-Ochoa said. In particular, Toronto‘s rate of arrears more than quadrupled to 0.26 per cent in the third quarter of 2025 from 0.06 per cent in the same period of 2022.

Ms. Bourassa-Ochoa said Toronto suffered some of the worst increases in mortgage stress owing to high prices, a weak job market and a large number of investors who are struggling with a beleaguered condo market.

“Investors are facing rising carrying costs and the majority of them are in a negative cashflow position,” said Ms. Bourassa-Ochoa, who said the difficulty of selling condos in today’s market is also hurting investors and causing further delinquencies.

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The rate of mortgages in arrears in Toronto is forecast to climb to 0.34 per cent by the end of 2026, although other cities like Ottawa, Montreal and Winnipeg are expected to have mortgage arrears peak in mid-2026 before decreasing.

The proportion of mortgages that are behind on payments is still below historical and prepandemic levels, and Ms. Bourassa-Ochoa said that’s because emergency supports from financial institutions during the pandemic helped keep delinquencies at an unusually low level.

TD’s Ms. Solovieva had an even more optimistic outlook than CMHC. She said the worst of the renewal wave is likely behind us even though one million renewals are expected in 2026. She said many of those renewals will be from shorter-term mortgages or variable mortgages that could face a smaller bump in interest rates.

However, BMO senior economist Robert Kavcic said he expects renewals to crest in mid-2026 and that delinquencies will continue to rise, especially in Ontario.

As renewals from low pandemic-era interest rates taper off, Ms. Bourassa-Ochoa said the new risk for delinquencies will be Canada’s trade relationship with the U.S. and tariffs threats – especially in some regions where job markets depend on free trade.

Strong employment and wage growth was one factor that helped Canada deal with a wave of renewals better than expected, but Ms. Bourassa-Ochoa said rising unemployment could worsen the picture.

“In some tariff-exposed regions, we’re already seeing signs of higher non-mortgage delinquencies … which is typically a leading indicator of mortgage arrears,” Ms. Bourassa-Ochoa said.