Household belt-tightening is reshaping how brokers talk budgets, debt and homeownership
Canadians enter this holiday season with a sharper eye on household finances, a shift that mortgage professionals said have clear implications for how clients approached debt, savings and homeownership decisions.
A new national survey for TD found that more than one in three Canadians (36%) intend to cut back on holiday expenses this year, up from 32% in 2024, as households redirect spending toward day-to-day needs.
Among those trimming costs, 60% said groceries and household essentials would account for at least half of their total holiday spend.
Two-thirds (67%) of those cutting back point to the higher cost of living, while 29% said they are prioritizing saving.
Many respondents report changing how they celebrate: 46% cuts back on gifts for family, 44% dials down social spending and 38% scales back gifts for friends.
“The holidays may feel different this year, but Canadians are showing that festive spirit isn't about spending big; it's about spending smart,” said Joe Moghaziel, vice president, Everyday Advice Journey at TD.
“From creative gift-giving to leveraging loyalty points, the survey shows a shift toward intentional choices that keep celebrations meaningful without adding financial strain.”
Holiday strain meets mortgage stress
The TD findings echo results of a BMO survey in which 41% of respondents plan to cut back on spending, with 61% adjusting holiday plans because of rising prices and economic pressures.
Meanwhile, nearly one in 10 are unsure when or if they would be able to pay off their holiday bills, raising concerns about household debt loads heading into 2026.
Canadian consumer insolvencies climbed to their highest level since the global financial crisis, with new data from the Office of the Superintendent of Bankruptcy (OSB) showing a 4.8% year-over-year rise in Q3 2025 filings.
More than 1.45 million households also missed a credit payment in the third quarter, according to Equifax Canada's latest market analysis.
The figure marked a troubling jump of 46,000 from the previous quarter and reflected a broader deterioration in payment discipline that now threatens to worsen during the holiday shopping season.
The national 90-day non-mortgage delinquency rate climbed to 1.63%, up 14% year-over-year, as total consumer debt reached $2.62 trillion.
Consumer confidence and debt levels often influence mortgage activity, especially during periods of economic stress. When clients feel squeezed by inflation or job insecurity, they’re more cautious about taking on new debt or making big moves.
Local spending and younger borrowers
Despite tighter budgets, the TD survey suggests that many Canadians still back local businesses: 81% plans to support Canadian companies, and among those shoppers, 57% said at least half their holiday budget would go to small businesses.
“Every dollar spent at a local small business is a vote for your community,” said Julia Kelly, vice president, Small Business Banking and Segment Strategy at TD.
“This season, look for ways to support local retailers and artisans—whether it's shopping at a neighbourhood market or choosing locally made gifts. Small changes in spending habits can have a big impact, both for your wallet and for the businesses that help to make your community unique.”
Younger Canadians, meanwhile, appeared somewhat more upbeat: one in four Gen Z and Millennials (25% and 24% respectively) plans to increase holiday spending this year, compared with 9% of Gen X and 8% of Boomers.
The survey was conducted by Harris Poll for TD from October 23 to 27 among 1,516 Canadian adults.
For mortgage brokers and lenders, the convergence of higher living costs, elevated debt loads and more cautious seasonal spending suggest that affordability conversations would remain central well into 2026.
The latest wave of holiday data point to a consumer base that has grown more deliberate about every dollar – a mindset that is likely to carry through to major decisions on borrowing, refinancing and home purchases.
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