Equifax Canada Reports Significant Rise in Mortgage Delinquencies in Ontario Amid Growing Consumer Debt

Ontario mortgage delinquencies are rising, with financial strain affecting consumers amid increasing overall debt levels in Canada.

Quiver AI Summary

The Equifax Canada Q4 2024 Market Pulse Consumer Credit Trends Report highlights a troubling rise in mortgage delinquencies in Ontario, where missed payments have surged by over 50% compared to pre-pandemic figures. Total consumer debt in Canada hit $2.56 trillion, marking a 4.6% increase from 2023, largely driven by a significant rise in non-bank auto loans. While lower interest rates have provided some relief for certain consumers, many Ontario mortgage holders are struggling with high debts and increased living costs. The delinquency rates for both mortgage and non-mortgage debts in Ontario far exceed those in other provinces, reflecting deep financial strains. The report also indicates that with many homeowners facing higher payments upon mortgage renewal, particularly in 2025, the financial outlook remains precarious for many Canadians amidst economic challenges.

Potential Positives

• Equifax Canada's Q4 2024 report indicates a 39% year-over-year increase in new mortgage originations, suggesting a rebound in the mortgage market.
• First-time homebuyer activity has increased significantly, with a 28.2% rise, indicating renewed interest in home purchases.
• Despite challenges, the average loan amount for mortgage renewals increased by 2.9% compared to the previous year, reflecting a stable market trend.
• Consumers have shown improvements in credit card repayment habits, with more people paying off balances in full, which may indicate better financial management among certain consumers.

Potential Negatives

• Mortgage delinquencies in Ontario have surged over 50% above pre-pandemic levels, indicating a significant financial strain on homeowners in the region.
• Missed mortgage payments rose nearly threefold compared to 2022, reflecting deeper financial distress among Ontario borrowers.
• The dramatic increase in delinquency rates in Ontario far outpaces changes in other provinces, raising concerns about regional economic stability and consumer financial health.

FAQ

What are the key findings of the Equifax Q4 2024 Credit Trends Report?

The report highlights rising mortgage delinquencies in Ontario and a significant increase in overall consumer debt in Canada.

How much has consumer debt increased in Canada?

Total consumer debt in Canada reached $2.56 trillion, marking a 4.6% increase from 2023.

What region in Canada is experiencing the highest mortgage delinquencies?

Ontario is facing the highest mortgage delinquencies, with rates over 50% higher than pre-pandemic levels.

What factors are contributing to rising mortgage delinquencies in Ontario?

High living costs, mortgage renewals with increased payments, and substantial mortgage balances are significant contributing factors.

How has consumer spending been affected in recent months?

Credit card debt grew by 7.8% in Q4 2024, with younger consumers notably struggling with missed payments.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

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Full Release

- Mortgage Delinquencies Rising in Ontario Amidst Rising Consumer Debt -

Equifax Canada Market Pulse Quarterly Consumer Credit Trends Report

TORONTO, Feb. 25, 2025 (GLOBE NEWSWIRE) -- A growing financial divide is emerging across Canada, with some borrowers benefiting from lower interest rates while others struggle under mounting debt. According to Equifax Canada’s Q4 2024 Market Pulse Consumer Credit Trends Report, some Ontario mortgage holders are experiencing severe financial distress, with delinquencies more than 50 per cent higher than pre-pandemic levels.

Total consumer debt in Canada reached $2.56 trillion at the end of 2024, a 4.6 per cent increase over 2023. Non-bank auto loans drove much of this increase, rising 11.7 per cent year-over-year, while the average non-mortgage debt per consumer reached $21,931, exceeding pre-pandemic levels.

“While some consumers are doing better and seeing financial improvements from lower interest rates, financial pressures have intensified for some Canadians, as well as mortgage holders in certain regions, in particular in Ontario and British Columbia,” said

Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada.

“At first glance, the numbers are not concerning, but when we look deeper at a more granular level, many are feeling the strain of high living costs and mortgage renewals with higher payments, while other consumers are doing better and seeing financial improvements from lower interest rates and income growth.”

For some homeowners, rate cuts have provided some relief. Some borrowers with home equity lines of credit have seen delinquency rates stabilize. Many of these consumers have improved their credit card repayment habits, with more people paying off balances in full.

Ontario Mortgage Holders Under Pressure and Missing Payments



More than 11,000 mortgages in Ontario recorded a missed payment in Q4 2024 — nearly three times the number seen in 2022. Mortgage holders who are falling behind in their payments are also carrying substantially higher mortgage balances, reflecting the continued financial strain of higher than pre-pandemic interest rates. The 90+ day mortgage balance delinquency rate in Ontario surged 90.2 per cent year-over-year to 0.22%, far outpacing the change in delinquency rates in other provinces, with BC at 37.7 per cent, Alberta at -3.6 per cent, Quebec at 41.2 per cent, the Prairies (MB and SK) at 0.6 per cent, and the Atlantic provinces (NL, PE, NB, NS) at 15.7 per cent.

Ontarian mortgage holders are struggling with other forms of debt as well. The 90+ day non-mortgage balance delinquency rate jumped 46.1 per cent from Q4 2023, while other provinces saw smaller rate jumps, with BC at 21.6 per cent, Quebec at 23.3 per cent, Alberta at 6.1 per cent, the Prairies (MB and SK) at 4.1 per cent, and the Atlantic provinces (NL, PE, NB, NS) at 1.5 per cent. In addition, Ontario’s overall rise in non-mortgage delinquency rate was 23.9 per cent, above the national average of 18 per cent.

“Mortgage holders will typically do everything they can to keep up with payments,” Oakes explained. “The fact that we’re seeing missed payments rise so sharply suggests deeper financial strain. Depending on the type of credit, missed payments have increased from 10 to 80 per cent, compared to pre-pandemic levels.”

In Toronto, 90+ day non mortgage delinquency rates hit 2.06 per cent, higher than most major cities, reflecting the region’s unique financial challenges.

Canadian Housing Market: Rebound Tempered by Renewal Challenges

The overall Canadian mortgage market showed signs of recovery, with new mortgage originations rising 39 per cent year-over-year. First-time homebuyers returned, with a 28.2 per cent increase from the extreme lows of purchases in Q4 2023. Although the average loan amount for first-time buyers remains 6.6 per cent higher than Q4 2023, monthly payments have decreased 7.9 per cent, or $200 lower, to an average loan amount of $2,330.

Mortgage renewals and refinancing accounted for over 50 per cent of new mortgage originations in Q4 2024, increasing 10.6 per cent from 2023. The average loan amount and balance on mortgage renewals in 2024 surpassed those in 2023 and 2022, with the average balance increasing by 2.9 per cent in 2024 compared to 2023.

Many consumers renewing their mortgage continue to have higher monthly payments due to elevated interest rates compared to pre-pandemic and pandemic levels, when they last locked in their low rates. This reality is expected to affect around a million mortgages due for renewal in 2025, originating from the low-interest-rate environment of 2020. These borrowers may face significantly higher payments despite recent rate reductions. A quarter of mortgage-holders saw their monthly mortgage payment increase by over $150 at renewal in Q4 2024.

Consumer Spending and Credit Behaviour

Credit card debt climbed 7.8 per cent in Q4 2024, though at the slowest rate since 2022. Seasonal spending in December hit a two-year high, with average credit card purchases adjusted for inflation reaching $2,228 per cardholder, a 2.2 per cent increase from 2023.

Younger and lower income Canadians are experiencing missed payments on credit cards, auto loans, and lines of credit, signaling financial strain among these groups.

“Despite recent rate cuts and GST tax relief, challenges persist for certain consumers, particularly in consumer debt and housing. The added uncertainty of U.S. tariffs underscores the need for a balanced approach to debt, affordability, and trade. The coming year will be critical for Canada's economic stability,” said Oakes.

Age Group Analysis

– Debt & Delinquency Rates (excluding mortgages)

Major City Analysis

– Debt & Delinquency Rates (excluding mortgages)

Province Analysis

- Debt & Delinquency Rates (excluding mortgages)

* Based on Equifax data for Q4 2024

About Equifax


At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by nearly 15,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit


Equifax.ca


.

Contact:

Andrew Findlater


SELECT Public Relations




afindlater@selectpr.ca




(647) 444-1197

Angie Andich


Equifax Canada Media Relations




MediaRelationsCanada@equifax.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.