Canadian Mortgage Debt Nears $2 Trillion Threshold as Financial Pressures Mount
According to the latest market pulse report from Equifax Canada Inc., mortgage debt in Canada reached a staggering $1.95 trillion during the fourth quarter of 2025. This represents a 2.6 percent increase compared to the previous year, signaling continued growth in housing-related borrowing despite economic headwinds.
Projections Point Toward Historic Milestone
Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, anticipates that mortgage debt will surpass the $2 trillion mark in 2026. "Despite the central bank's policy interest rate falling from prior peaks to 2.25 percent and home prices declining in some regions, it remains challenging for first-time home buyers to enter the market," Oakes explained.
The data reveals that average new mortgage amounts have continued their upward trajectory:
- $363,778 for all homebuyers (a four percent increase)
- $441,301 for first-time buyers (a five percent increase)
Delinquency Rates Surge Across Provinces
Missed mortgage payments have been steadily increasing, particularly in higher-cost provinces such as Ontario. Equifax data shows that 90+ day mortgage balance delinquency rates jumped 30 percent year-over-year nationwide during the fourth quarter, with Ontario experiencing a dramatic 54.5 percent increase.
"We are witnessing the knock-on impact of transitioning away from super low rates during the COVID period," Oakes noted, highlighting the financial strain on homeowners.
Lender Switching Accelerates Amid Renewal Pressures
Homeowners seeking more affordable rates have driven a significant surge in lender switching, which has soared by 30 to 40 percent compared to the second half of 2024. This trend coincides with approximately 1.2 million mortgages expected to renew at higher rates this year.
The Bank of Canada projects that average mortgage payments will rise by six percent, with some borrowers potentially facing increases between 15 and 20 percent.
Broader Consumer Debt Landscape
Total consumer debt reached $2.65 trillion in the fourth quarter of 2025, marking a three percent year-over-year increase. While mortgage debt constitutes about three-quarters of this total, missed payments on non-mortgage debt also peaked at the end of December.
Key findings from the broader debt analysis include:
- 90+ day balance delinquency rates for non-mortgage debt rose to 1.73 percent
- Delinquencies were highest among younger borrowers aged 26 to 35, attributed to higher unemployment levels and reduced savings
- Credit card balances swelled four percent to reach a record $131 billion
Cautious Outlook for 2026
While Equifax maintains a "cautiously optimistic" stance for 2026, Oakes warned that headwinds such as large volumes of mortgage renewals could potentially worsen credit stress and delinquency rates if interest rates increase again.
Credit ratings agency Fitch Ratings echoed these concerns in a recent report, stating: "Households with outsized leverage, lower incomes, or those employed in U.S. export-reliant sectors will remain more vulnerable." The agency projected mortgage delinquencies to remain fairly stable in 2026 but noted that higher mortgage payments could affect delinquencies across other forms of debt, including credit cards and auto loans.
Despite the concerning trends, there is a silver lining: missed payments on credit cards, which typically escalate by about seven percent in the fourth quarter due to holiday spending, only rose by three percent. "It appears consumers have moderated their credit card spending," Oakes observed. "That's positive news amid the broader financial challenges."
