Canada’s long-anticipated mortgage renewal wave is beginning to show up in household finances, with signs of stress emerging in some regions and among certain borrowers, even as overall arrears remain historically low.
New analysis from Canada Mortgage and Housing Corporation, drawing on data from Equifax, suggests the national mortgage arrears rate, the share of borrowers who are 90 days or more behind on payments, has been rising since late 2023. Still, the rate remains low by historical standards.
Experts say the trend reflects two different financial realities for Canadian homeowners. While many households have managed to absorb higher borrowing costs, others, particularly in high-priced housing markets, are feeling mounting pressure as they renew mortgages at rates well above those secured during the pandemic.
Toronto and Vancouver are expected to see the strongest growth in arrears over the coming year. In Toronto, arrears have more than quadrupled from post-pandemic lows, though they remain low in absolute terms. Analysts point to high household debt levels, softening home prices, weaker resale markets and a slower labour market in the Greater Toronto Area as key factors.
Vancouver is also seeing a steady increase in arrears, driven by high debt loads and rising carrying costs, but the pace of deterioration is expected to be more moderate than in Toronto.
Elsewhere, the picture is more stable. Montréal’s delinquency risk is projected to remain relatively steady, while Prairie cities such as Calgary and Edmonton face varying degrees of risk tied in part to local labour market conditions. Ottawa, Winnipeg and Halifax are expected to see only modest increases in arrears.
Borrower profiles also matter. First-time buyers who entered the market during the pandemic, when home prices were high and interest rates were low, are considered among the most vulnerable. Many of these households carry large mortgages relative to their incomes and have limited home equity, making them more exposed as rates reset.
More than 1.5 million households have already renewed their mortgages at higher rates, and roughly another million are expected to do so over the next year. Higher monthly payments have squeezed budgets, reduced savings and prompted some households to cut back on other spending or rely more heavily on consumer credit.
Despite these pressures, several factors have helped keep arrears from rising more sharply. Many borrowers have extended their amortization periods at renewal to lower their monthly payments, even if that means paying more interest over time. Income growth has also helped some households absorb higher costs, though rising unemployment could test that resilience.
Federal mortgage rules have also played a role. Mandatory stress tests introduced over the past decade required borrowers to qualify at higher interest rates than those they actually paid, providing a buffer as rates climbed.
Even so, analysts warn that risks are becoming more concentrated in specific regions and borrower groups. As the renewal wave continues into 2026, experts say close monitoring will be needed to identify pockets of strain and ensure support is targeted where it is most needed.