Ontario is experiencing a troubling rise in mortgage delinquencies, with missed payments reaching levels significantly higher than pre-pandemic figures. According to Equifax Canada’s Q4 2024 Market Pulse Consumer Credit Trends Report, over 11,000 Ontario mortgages missed a payment in the last quarter of 2024—a nearly threefold increase from 2022.
The Growing Divide: Financial Stability vs. Distress
While some Canadians are benefiting from lower interest rates, others are struggling under mounting debt. The report, titled Stable versus Struggling: Canada’s Financial Divide Widens, highlights that provinces like Ontario and British Columbia—where the cost of living is high—are facing the most financial strain. Younger and lower-income individuals are bearing the brunt of this pressure, with many falling behind on their financial obligations.
Rebecca Oakes, Vice-President of Advanced Analytics at Equifax Canada, explains that homeowners in Ontario are facing increased financial stress, particularly those with lower savings buffers. Meanwhile, renters and non-homeowners—especially young and low-income individuals—are also struggling with growing financial burdens.
Mortgage Delinquencies Skyrocket in Ontario
The report reveals alarming statistics:
Ontario mortgage delinquencies were over 50% higher than pre-pandemic levels in Q4 2024.
Over 11,000 mortgages in the province missed a payment—almost three times the number seen in 2022.
The 90+ day mortgage balance delinquency rate surged 90.2% year-over-year to 0.22%.
The 90+ day non-mortgage balance delinquency rate jumped 46.1% year-over-year.
By comparison, British Columbia saw a 37.7% increase in mortgage delinquencies, Quebec 41.2%, and the Atlantic provinces 15.7%. Other regions like Alberta (3.6%) and the Prairies (0.6%) experienced more stable delinquency rates.
Interest Rate Pressures and Renewals in 2025
One of the major concerns for homeowners is the ongoing pressure of higher interest rates. While rates have begun to drop, they remain significantly higher than the ultra-low rates many homeowners secured before or during the pandemic. This disparity—often 100 to 200 basis points—will cause financial strain for those renewing their mortgages in 2025.
An estimated one million mortgage-holders will see their terms end this year, facing much higher interest rates. In Q4 2024 alone, one in four mortgage-holders saw their monthly payments increase by over $150 upon renewal.
Although mortgage stress tests aim to ensure borrowers can withstand rate increases, many homeowners are now dealing with the added burden of rising living costs. The combination of higher mortgage payments and increased day-to-day expenses could push more borrowers into financial distress.
A Silver Lining? New Mortgage Activity and Potential Rate Cuts
Despite these challenges, there are some positive trends in the mortgage market:
New mortgage originations rose 39% year-over-year in Q4 2024.
First-time homebuyer activity increased 28.2% compared to the lows of Q4 2023.
Average monthly mortgage payments dropped 7.9% (or $200) to $2,330.
However, first-time buyers are still paying 6.6% more than they were a year ago, highlighting the continued affordability struggles in Ontario.
External Economic Pressures: The Impact of U.S. Tariffs
Looking ahead, the Canadian economy could face additional challenges from potential U.S. tariffs. If imposed, these tariffs could slow economic growth, reduce investment, and lead to job losses. While the Bank of Canada might respond with further interest rate cuts to offset these effects, such a move would come in response to economic hardships that could negatively impact homeowners.
How Ontario Homeowners Can Prepare
With mortgage delinquencies on the rise, it’s crucial for homeowners to take proactive steps to safeguard their financial health:
Review Your Budget: Factor in potential mortgage payment increases and identify areas to cut costs.
Consider Early Renewal Options: Locking in a rate before further increases may help mitigate payment shocks.
Build an Emergency Fund: A financial cushion can provide relief in case of unexpected expenses.
Seek Professional Advice: Mortgage brokers and financial advisors can offer strategies tailored to your specific situation.
While Ontario’s real estate market remains active, the financial strain on many homeowners is real. Staying informed and preparing for potential rate hikes can help mitigate financial challenges in the months ahead.
