Mortgage Delinquencies Surge in Toronto as Renewal Crisis Intensifies
The Canada Mortgage and Housing Corporation (CMHC) has issued a stark warning about the state of mortgage delinquencies across Canada, with particular concern focused on Toronto where payment defaults have more than quadrupled since 2022. According to a new report from the national housing agency, this troubling trend shows no signs of abating as approximately one million mortgages are scheduled for renewal this year, most at significantly higher interest rates.
National Mortgage Arrears on the Rise
CMHC data reveals that the national mortgage arrears rate—representing homeowners who have missed payments for 90 days or more—has experienced a significant increase of seven basis points from the third quarter of 2023 to the third quarter of 2025. This upward trajectory in delinquencies comes at a critical juncture for Canadian homeowners, with the Bank of Canada projecting that 60 percent of those renewing mortgages this year will face higher payments, averaging six percent increases but potentially reaching 15 to 20 percent for popular five-year fixed mortgages.
Toronto's Perfect Storm of Financial Pressure
The situation in Toronto represents a convergence of multiple economic pressures creating what CMHC describes as elevated delinquency risks throughout 2026. Homeowners in Canada's largest city are grappling with several compounding factors:
- Higher mortgage payments due to interest rate increases
- Greater household debt levels from elevated real estate costs
- Falling home prices and slowing sales in the housing market
- A weaker job market reducing income stability
- Individual real estate investors facing rising costs alongside falling rental income
The Toronto Regional Real Estate Board (TRREB) has reinforced these concerns, projecting further home price declines in the first half of 2026 and reporting December sales that fell 20 percent compared to the previous year.
Vulnerable Homebuyer Demographics
CMHC identifies pandemic-era homebuyers as particularly vulnerable to the current financial pressures. Those who purchased properties between 2020 and 2024 now face sharp increases in interest rates on already substantial debt levels when renewing their mortgages for the first time. Equifax Inc. data confirms that arrears are rising fastest among buyers from these years, demonstrating their heightened vulnerability to interest rates that have climbed substantially since their initial mortgage agreements.
Regional Variations in Delinquency Risk
While Toronto faces the most severe delinquency increases, other major Canadian cities are experiencing similar pressures:
- Vancouver is seeing steady increases in mortgage arrears, though at a slower pace than Toronto, attributed to rising costs and weaker resale conditions.
- Calgary and Edmonton face moderate delinquency risks, with Edmonton's more sensitive job market creating additional financial vulnerability.
Broader Economic Implications
The mortgage delinquency crisis reflects broader economic challenges facing Canadian households. Statistics Canada's latest household wealth survey reveals that mortgage debt costs have outpaced increases in real estate value during the fourth quarter, eroding homeowner equity and financial stability. This trend suggests that homeownership may no longer provide the financial security many Canadians have historically relied upon.
As CMHC continues to monitor these developments, the agency emphasizes that delinquency pressures in the Greater Toronto Area are expected to remain elevated throughout 2026, with no immediate relief in sight for homeowners struggling with rising payments in a challenging economic environment.
