Equifax Reports Rising Delinquency Rates Among Mortgage-Holders in BC and Ontario during Q4

Equifax Canada reported a rise in missed payments on mortgages and credit cards by consumers in Ontario and British Columbia during the fourth quarter of 2023.

This trend reflects the ongoing impact of higher interest rates and inflation on consumers, according to Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada.

As mortgage renewals occur and in areas with high housing prices in Canada, the strain on consumers is becoming more evident.

Ms. Oakes noted an increase in missed payments on credit accounts, especially among younger homeowners in these provinces.

The mortgage delinquency rates in Ontario and B.C. surpassed pre-pandemic levels, with Ontario experiencing a 135.2% increase and B.C. seeing a 62.2% rise.

Equifax Canada also highlighted an increase in missed credit payments among financially stressed homeowners, particularly those 36 and younger.

As mortgage renewal periods approach, individuals face payment shocks, especially in expensive housing markets like Ontario and B.C.

Youthful consumers with high mortgage debt and limited savings are more susceptible to financial stress, leading to missed credit card payments.

Ms. Oakes expressed concern over the rising delinquency rates in B.C. and Ontario due to high housing prices in these regions.

Outside these provinces, where mortgage amounts are lower, delinquency rates are rising at a slower pace and remain below pre-pandemic levels.

In the fourth quarter, mortgage delinquency rates and overdue non-mortgage debts increased nationally, reflecting the challenge for consumers to meet higher interest rates after renewing in the low-rate environment of 2020.

Monthly mortgage payments rose post-renewal, with a significant increase in B.C. and Ontario.

Upcoming mortgage renewals will be crucial for many homeowners, according to Equifax Canada.

Total consumer debt reached $2.45 trillion in the fourth quarter, with non-mortgage debt seeing a 4.1% increase driven by credit card debt.

While consumer insolvency levels are still below pre-pandemic levels, the increase in mortgage holders filing for bankruptcy is a troubling trend, particularly in Ontario and B.C.