As interest rates and inflation pressures persist, Equifax Canada reveals a notable increase in missed mortgage and credit card payments in Ontario and British Columbia for Q4 2023. The phenomenon, highlighted by Rebecca Oakes, Equifax Canada’s Vice President of Advanced Analytics, underscores the mounting financial strain on consumers, particularly as they renew their mortgages in areas where housing costs soar.
According to the agency, mortgage delinquency rates in these provinces have not only escalated but have now exceeded levels seen before the pandemic. Ontario experienced a staggering 135.2% surge in mortgage delinquency rates year over year, while British Columbia saw a 62.2% increase. This troubling trend is accentuated among homeowners under 36, who are finding themselves increasingly unable to meet credit payments, exacerbated by the renewal of mortgage terms under less favourable conditions.
This demographic, often saddled with substantial mortgage debts and limited savings, faces ‘payment shocks’ upon mortgage renewal—precipitating a financial tipping point for some. The resulting stress is visibly reflected in rising credit card payment delinquencies, marking a concerning pattern of financial distress.
The delinquency spike is particularly pronounced in British Columbia and Ontario, where higher housing prices contribute to greater financial burdens. Conversely, areas with lower mortgage values outside these provinces report a more moderate increase in delinquency rates, remaining well below pandemic precedents.
Nationwide, mortgage delinquency rates surged by 52.3% in the last quarter of 2023 compared to the previous year, with non-mortgage debt delinquency over 90 days overdue climbing by 28.9%. Homeowners renewing mortgages face stark adjustments, with average monthly payments climbing by $457—those in B.C. and Ontario facing even steeper increases above $680.
With total consumer debt reaching $2.45 trillion, a 3.2% year-over-year increase, and non-mortgage debt up by 4.1%, largely due to rising credit card debt, the financial landscape for Canadian homeowners appears increasingly challenging. The uptick in consumers missing payments on credit products, surpassing 2019 levels, coupled with a notable rise in mortgage-related bankruptcies, especially in Ontario and B.C., signals a worrying trend, according to Equifax Canada.
