Insider: CMHC And Equifax Sound The Alarm On Canada’s Mortgage Market

Canada’s mortgage market is showing signs of strain as both the Canada Mortgage and Housing Corporation (CMHC) and Equifax Canada have raised alarms. In early 2025, Equifax reported that household debt in Canada reached a staggering $2.55 trillion, with non-mortgage debt averaging $21,859 per person. That’s a heavy burden for many families, and Toronto emerged as a hotspot where overdue non-mortgage payments rose the fastest.

The pressure comes from two sides: some people are trying to dig their way out of debt, while others—especially younger and lower-income Canadians—are falling further behind. Delinquencies are highest among borrowers under 35 years old. This split is deepening a debt divide that could shake the housing market.

Mortgage renewals are on the rise, not because home buyers are jumping in with both feet, but because many pandemic-era mortgages must now be renewed at higher interest rates. CMHC’s recent survey found that one in five people renewing their mortgage used one line of credit to pay off another. Some homeowners are switching lenders, particularly in Ontario, Alberta, and British Columbia, where about 28% of borrowers are shopping around.

Yet these renewals don’t solve the core problem: affordability still stings. The average mortgage size increased by 7.5%, even though monthly payments only dropped a bit. While first-time buyer interest is up—about 40% more than a year ago—they’re entering a market weighed down by debt and economic uncertainty.

Ontario is feeling the pinch more than other provinces. It leads Canada in both mortgage and non-mortgage delinquency rates, with 90-day payment defaults up by 71.5% on mortgages and 24% on other debts. Rising unemployment there makes it look like the province might already be slipping into a mild recession.

This matters for real estate because debt troubles limit people’s ability to qualify for new mortgages or keep current ones. CMHC found 70% of borrowers fear defaulting because of the economy, 46% worry about losing income from job loss, and 24% say existing debt might cause them to miss payments. While reduced credit card use hints at caution, rising delinquencies among vulnerable borrowers suggest a rough road ahead.