Here's what the latest data says about customers' ability to absorb higher payments
Mortgage delinquencies are on the rise across some parts of Canada as borrowers absorb the shock of higher payments at renewal time – but there’s a sliver of good news on the debt front, according to a new Equifax report.
While total mortgage debt jumped in 2025’s fourth quarter and missed payments have been increasing, borrowers are also tightening their purse strings and reining in spending, the company’s latest Market Pulse Consumer Credit Trends and Insights showed.
That indicates borrowers are taking steps to mitigate risk amid choppy economic waters, according to Equifax’s vice president of advanced analytics Rebecca Oakes (pictured top), who sees cause for cautious optimism as non-mortgage debt stabilizes.
“When we get to the last quarter we see a lot of standard movements [in spending] every year because it’s the holiday season,” Oakes told Canadian Mortgage Professional. “I think the biggest eye-opener for us was this year, we actually saw consumers pulling back quite a lot in terms of their credit card spend.
“It always goes up year-end – and it did, but not as much as what we’ve seen in the past. Missed payment levels on credit cards, although they’ve risen, have only risen by about half of what they typically do.”
That more conservative outlook suggests many borrowers are steeling themselves for a jump in mortgage payments and chimes with conventional wisdom that Canadians sacrifice other expenses before falling into trouble with their mortgages.
Mortgage pain growing, but some encouraging signs
But that’s not to say the mortgage picture is rosy. Compared with the same time last year, missed payments on mortgages in certain areas are inching higher.
That’s especially the case in Ontario, where bigger mortgages and higher debt are putting the squeeze on households when interest rates and payments spike upon renewal.
The credit reporting agency has also noticed a higher volume of lender switching at renewal time with borrowers now more sensitive than ever to lowering their rate and expected monthly mortgage costs.
Still, there’s another positive trend: early missed payments, or the number of borrowers who have just fallen behind on their mortgages, appear to have stabilized compared with a quarter previously.
“On a mortgage, missing just one payment is quite predictive of what’s going to happen. We’ve started to see that slow down,” Oakes said.
“And for younger age groups, if we look at missing one payment on mortgages compared to last quarter, that’s come down for younger consumers a little bit faster than some of the older ones.”
Resilience growing among younger homeowners
Younger homeowners are often at greater risk of mortgage arrears than older Canadians, as highlighted in a recent Canada Mortgage and Housing Corporation (CMHC) report on delinquencies.
They usually have smaller savings to fall back on, and many purchased their first property during the COVID-19 pandemic – giving them less built-up home equity to tap into if needed.
However, that cohort has also proven resilient, Oakes said, by stripping back spending even during the often costly holiday season in December to help manage financial strain.
“They might be less equipped when there’s difficult times in the economy because they don’t have lots of savings and things like that to help them through the buffer,” she said.
“But actually, they do seem to be demonstrating a lot more of, ‘OK, I’m going to pull back my spending. I’m going to think a bit more about what I’m doing.’”
The mortgage renewal wave may not have been the crisis many feared, but it’s still likely to cause turbulence in more heavily indebted parts of Canada throughout 2026.
Ontario and British Columbia, home to the country’s two priciest markets, are especially vulnerable, Oakes said.
“Interest rates have been held for a while, so we’ll need to see how that pans out and whether they stay [steady] or go up or down,” she said. “Obviously, that’s going to have a pretty meaningful effect.
“I do see 2026 perhaps having a little bit more stabilization and an improving position. That’s our general outlook, given what we’ve seen towards the back end of last year. But there are still going to be those hotspots where there’s more financial stress.”
This article is part of CMP’s focus on Canada's renewal wave for February, spotlighting how mortgage brokers and lenders are helping clients face renewal challenges in 2026. Find all the rest of our special coverage here.
