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According to the latest data from Equifax Canada Co., 90+ day Mortgage balance delinquency rates jumped 30 per cent year over year in the fourth quarter across Canada, rising as much as 54.5 per cent in Ontario.

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Toronto-Dominion (TD) Bank economist Maria Solovieva said that aggregate mortgage default numbers have not reached unprecedented levels yet, but there are clearly “strains” in some pockets, or areas of the country with greater affordability constraints.

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CMHC is most concerned about higher delinquency rates in Toronto and Vancouver, compared with the rest of the country, ab Iorwerth said.

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The mortgage arrears rate in Toronto has more than quadrupled from postpandemic lows, according to a February report from CMHC which uses data from Equifax. While mortgage arrears still remain low, CMHC said it projects they will continue climbing over the next year, due to a combination of higher household debt levels and housing prices, a weaker labour market and investor activity leading to softer rents and increasing carrying costs.

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Declining home prices and sluggish sales also means homeowners may be less able to sell quickly and rely on home equity if needed amid financial challenges, CMHC said.

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Mortgage delinquencies don’t necessarily show up in the data right away, Solovieva said. “It’s the last indicator.”

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Data consistently indicate that borrowers tend to default on auto loans first and then credit cards before defaulting on their mortgage, which comes with more severe consequences such as foreclosure and the possibility of losing other assets, said ab Iorwerth.

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Auto loan delinquencies are currently trending highest at 2.6 per cent, with credit card delinquencies just behind at 1.8 per cent and climbing, he said.

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“Auto loans will be the primary candidate for delinquencies,” he said. “(Borrowers) will do absolutely everything to try and pay the mortgage.”

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Missed payments on non-mortgage debt peaked at the end of December, with 90+ day balance delinquency rising to 1.73 per cent, according to Equifax. Credit card balances rose four per cent to reach a record $131 billion in the fourth quarter of 2025.

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Solovieva said TD typically tracks monthly insolvency rates as an indicator of higher mortgage delinquency rates.

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Total consumer insolvencies ticked up by 2.3 per cent year over year in December, with consumer bankruptcies increasing by 4.3 per cent during the same period, according to the latest data from the Office of the Superintendent of Bankruptcy, a federal agency.

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“It’s not necessarily very alarming right now, but we are definitely watching that,” Soloveiva said. Other economic factors, such as changes in employment measures and trade negotiations, would affect TD’s mortgage delinquency forecast as well.

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Although lower interest rates have reduced some of the risks posed by the mortgage renewal wave, pandemic-era first-time homebuyers are still the group most at risk at defaulting on their mortgages, ab Iorwerth said.

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The Bank of Canada most recently reported in July that homeowners could see their mortgage rate jump by as much as 20 per cent upon renewals, with 60 per cent of all mortgage holders expected to see some payment increase in 2025 and 2026.

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“If your income growth did not catch up, or if you have any additional borrowing that restrains your ability to increase that mortgage payment by 20 per cent, then of course you may end up defaulting,” said Solovieva.

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She said Canadian households saw aggregate disposable income growth of nearly eight per cent in 2024, though this slowed to 4.7 per cent growth in 2025.

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“It’s still healthy,” she said. “This is why we didn’t see a massive increase in delinquencies.”