Most homeowners are avoiding the mortgage renewal crisis as Toronto and Vancouver flash warning signs, according to the CMHC. Despite a growing number of Canadians missing mortgage payments, the situation remains below historical norms, indicating that the country is handling the wave of pandemic-era mortgage renewals better than expected. However, experts warn that the mortgage arrears rate is expected to worsen in 2026, particularly in Toronto and Vancouver, the most expensive markets. The national rate of delinquencies rose by seven basis points to 0.22% between 2023 and 2025, a notable increase but not as widespread as some economists predicted. The trend is partly due to Canadians stretching their amortization periods to over 25 years, lowering monthly payments and avoiding the shock of higher interest rates. This strategy has helped banks and households prepare for the renewal wave proactively. Strong wage gains in 2024 further cushioned the impact of higher mortgage payments for some. However, Toronto and Vancouver have experienced the largest increases in mortgage arrears, with Toronto's rate more than quadrupling to 0.26% in Q3 2025 from 0.06% in the same period in 2022. The city's high prices, weak job market, and struggling condo market are contributing to the rising mortgage stress. The rate of mortgages in arrears in Toronto is forecast to climb to 0.34% by the end of 2026, while other cities like Ottawa, Montreal, and Winnipeg are expected to peak in mid-2026 before decreasing. The proportion of mortgages behind on payments remains below historical and pre-pandemic levels, thanks to emergency financial support during the pandemic. However, the future risk of delinquencies is shifting towards Canada's trade relationship with the U.S. and tariff threats, especially in regions dependent on free trade. Strong employment and wage growth have helped Canada manage the wave of renewals better than expected, but rising unemployment could worsen the situation.
