Affordability pressures continue to weigh down homeowners as renewal wave gathers pace
More than one in four Canadians, or 27%, say they are unable to pay all their bills and loans in full, according to TransUnion’s Q2 2025 Canada Consumer Pulse Study released this week. The study, which surveyed 982 Canadian adults between May 5 and May 18, found that affordability pressures and economic uncertainty continue to challenge household finances.
Matt Fabian, director of financial services research and consulting at TransUnion Canada, said, “Canadians are navigating a challenging financial landscape, with many adjusting their spending and prioritizing bill payments in response to rising costs and economic uncertainty.”
Among those expecting to miss payments, 68% cited credit card debt as their biggest concern. Despite Canada’s inflation rate returning to the Bank of Canada’s target, 96% of respondents said they remain worried about inflation, while 51% listed a recession among their top three financial concerns for the next six months.
Mortgage renewals add financial strain
The study highlights growing financial strain from mortgage renewals. Many Canadians who bought homes during the COVID-19 pandemic – when interest rates hit historic lows – are now facing higher payments, triggering what TransUnion describes as “payment shock.”
According to Fabian, “We’re at a critical moment where many Canadians who took on mortgages during the pandemic… are now facing rising payments and affordability pressures.”
TransUnion’s analysis revealed that since March 2022, over two million Canadians have seen their monthly mortgage payments rise by an average of 25%, from $1,527 to $1,908 as of March 2025. Those with increased mortgage payments are also accumulating more credit card debt – more than double compared with those whose payments remained unchanged.
The Bank of Canada’s 2025 Financial Stability Report noted that about 60% of Canadian mortgages will come up for renewal in 2025 or 2026. In response to high interest rates, 72% of Canadians said they do not plan to buy a home within the next year.
Canadians cut spending, fraud concerns persist
Economic volatility is prompting consumers to rein in expenses. About 44% of respondents said they plan to reduce discretionary spending, while 63% reported shopping more often for sales and discounts.
Despite heightened fraud awareness – with 46% reporting being targeted in the last three months – 37% of Canadians admitted they took no action on cybersecurity threats, many saying they were unsure how to respond.
Fabian noted, “Canadians continue to demonstrate financial resilience – adapting their spending habits, prioritizing bill payments, and taking steps to help recession-proof their finances,” though rising costs continue to pressure household budgets.
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