Concerning Rise in Mortgage Defaults in Canada

Equifax has released troubling figures that underline the housing affordability and cost of living issues facing Canadians.

According to the credit assessment firm, mortgage default rates have surged by over 52% between Q4 2022 and Q4 2023. Additionally, non-mortgage delinquencies that are 90 days or more overdue have increased by nearly 29% over the same period.

An Alarming Yet Nuanced Context

Despite these alarming increases, the actual amount of defaults in Canada remains low: only 0.14% for mortgages by the end of 2023. Ontario and British Columbia have seen the most significant spikes, with increases of 135% and 62% respectively in mortgage defaults. This problem particularly affects younger homeowners, those under 37 years of age.

The Specter of Bankruptcy

Equifax's report also notes a sharp rise in the number of mortgage holders declaring bankruptcy, with a 23% increase nationwide and a startling 76.5% rise in Ontario.

An Uncertain Future

The potential for even higher percentages looms, as over two million mortgages are due for renewal over the next two years at significantly higher rates.

In a separate report by TransUnion, total consumer debt in Canada was reported at $2.4 trillion in Q4 2023, representing a nearly 3.0% increase year-over-year.