Canada’s banks are facing their sharpest mortgage downturn in a decade. Canadian Bankers Association (CBA) data reveals delinquent mortgage volumes surged again in January. Hitting a decade high, these volumes are pushing the arrears rate up sharply, with both metrics nearly doubling within four years.
Canadian Mortgage Arrears Rate Hits 2017 Levels
CBA reported mortgage arrears rate.
Source: CBA; Better Dwelling.
Canadian mortgage arrears climbed 1 basis point (bp) to 0.27% in January, up 5 bps from last year. While it may seem small, this means arrears have grown roughly 27% faster than total mortgages. The January rate is the highest level since 2017, excluding the brief spike at the onset of the pandemic.
Canada Sees Delinquent Mortgage Volume Hit 2015 Recession Levels
The number of mortgages at least 90 days past due at Canadian banks.
Source: CBA; Better Dwelling.
The arrears rate isn’t just climbing due to a drop in new mortgage originations; the absolute volume of delinquencies is surging. The number of mortgages at least 90 days past due (DPD) climbed 4.2% to 13,442 in January, up 20.8% (+2,311) from last year—roughly double the record lows in mid-2022. Unlike the rate itself, sheer volumes haven’t been this high since the mid-2015 oil recession.
Canadian Banks See Longest Mortgage Contraction On Record
Adding to the pressure: Canadian banks are losing market share. Their total mortgage count fell 0.2% in January to 4.95 million, marking the fourth consecutive drop. That figure is down 1.0% over the past year and 3.3% (-170.5k) since the June 2022 peak. This rare contraction is the longest on record, amplifying rising mortgage delinquencies.
Banks are losing ground on both fronts: borrowers are defaulting faster, with a lack of new originations to cushion the blow. This trend is beyond a quick fix, pointing instead to a deeper structural shift. Attempting to patch over the stress has only compounded the risks, forcing regulators to quietly intervene to prevent systemic failure.
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