Mortgage Delinquency Is Up in These Cities: What to Do

A recent report from the Canadian Mortgage and Housing Corporation found that mortgage arrears rates are on the rise, and will likely continue to climb through the first quarter of 2025.

A mortgage is in arrears when payments are overdue by three or more months, according to the Canadian Bankers Association.

Toronto and Vancouver emerged as “housing markets that may go through sharp increases in mortgage arrears” in the next six to 12 months.

Calgary, Saskatoon, Halifax, and to some extent Winnipeg, are less likely to see increases in mortgage arrears.

Montreal, Ottawa and Edmonton appear stable now, but “warrant further monitoring” according to the CMHC report, which analyzed factors related to mortgage delinquency — including the job market, credit scores and economic variables — to make its predictions.

The report notes that higher arrears rates “could potentially be avoided if mortgage rates decrease more than expected or if market conditions, as measured by the sales-to-new-listings ratio, revert into sellers’ market territory, where there are significantly more buyers than sellers.”

But that’s a big ‘if.’

Homeowners in Toronto or Vancouver may already be feeling the squeeze. And if your mortgage renews in the next 12-24 months, you may be bracing for it as well. Here are steps you can take.

Know your options for mortgage help

Taking stock of your financial health (think: credit score, credit report and debt service ratios) and keeping an eye on current mortgage rates can help you protect your home and credit.

Also, take a moment to familiarize yourself with any alternative payment arrangements that may be available through your lender.

Depending on your lender, you might be able to:

Defer payments: A short-term arrangement during which mortgage payments are paused.
Extend your amortization: An arrangement that lengthens the loan repayment period to reduce monthly payments.
Add missed payments to your mortgage balance: An arrangement that rolls over missed payments into the total mortgage owing, so they can be repaid over a longer period.
Switch to a fixed interest rate: Variable rates can increase suddenly, leaving you to face a bigger monthly mortgage payment than you’d planned. Converting to a fixed-rate mortgage may insulate you from these changes, making it easier to budget for housing costs.

Keep calm and be proactive

Take a look at your emergency fund — could it absorb an unexpected expense? Aim to stash a little extra away if you can.

If your budget is already stretched thin, don’t panic; resolve to face the issue head on by taking action sooner than later.

If you experience — or anticipate — a financial change that could impact your ability to make timely payments, contact your mortgage lender immediately. Lenders may be open to making special arrangements to help you avoid default, but only if they’re made aware before a payment is missed.