Missed mortgage payments are soaring in BC and Ontario -- here's why

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More Canadians are missing mortgage payments, and BC and Ontario are leading the country for households falling behind.

The number of Canadians not paying their mortgage is still small, but it’s on the rise amid high interest rates and a ballooning cost of living. Mortgage delinquency rates across Canada rose to 0.14% nationally over the last 12 months from 0.09% a year ago, according to a new report from Equifax Canada.

The credit monitoring agency characterized delinquency rates as “soaring.” Although the increase was less than a percentage point, it’s still a 52% rise nationally. Even higher in BC, at 62%, and a 135% increase in Ontario. The number of people missing mortgage payments in BC and Ontario now surpasses pre-pandemic levels.

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British Columbians see mortgage payments jump more than $680 at renewal

Mortgage renewals have also been bad news for many Canadians. Homeowners in Ontario and BC saw their monthly payments jump by an average of $680 when they renewed in late 2023. Across Canada, the average jump was $457 monthly.

“As we assess the unfolding dynamics in the housing market, it’s evident that upcoming mortgage renewals will be pivotal for many homeowners,” said Rebecca Oakes, vice president of Advanced Analytics at Equifax Canada. “With the prospect of renewing mortgages at substantially higher rates than current ones, consumers who locked in historically low interest rates in 2020 — particularly those with substantial loan amounts — may face challenges in sustaining their payments.”

Younger homeowners aged 36 and under are missing more payments than their older peers, and the financial stress is also causing people to miss credit card payments.

Whereas before excess spending raised people’s credit card bills, rising credit card debt is now primarily driven by rising interest as people struggle to make monthly payments.

“Inflation levels are starting to fall across Canada, but sustained high consumer good prices combined with rising monthly credit payment levels means some will likely be pulling back on discretionary spend,” said Oakes.

Homeowners in provinces outside of BC and Ontario are slightly better off because their housing prices are lower — and their loan amounts are less. However, the high cost of living is contributing to missed payments and bankruptcy across the country.

“Factors such as high cost of living, inflation, credit card payments, and mortgage renewal worries are coming at consumers right now,” said Oakes. “Budgets have been pushed to the limit for some. There’s no doubt Canadians are feeling the financial pinch right now.”