Mortgage Delinquencies Up 17% Among First-Time Buyers, Says CMHC

New CMHC data reveals a concerning rise in missed mortgage payments, particularly among first-time homebuyers — prompting fresh concern about housing affordability and financial resilience across Canada.
The Canada Mortgage and Housing Corporation (CMHC) has released new statistics showing a 17% year-over-year rise in mortgage delinquencies among first-time buyers as Q2^nd of 2025. This sharp increase is being linked to affordability fatigue, higher loan-to-income ratios, and buyers who entered the market during peak rate periods.
While overall delinquency rates across Canada remain relatively low, CMHC says that new homeowners — especially those who bought between 2022 and mid-2024 — are showing early signs of financial strain.

Why Are First-Time Buyers Most At Risk?

Many of the affected borrowers purchased homes during the post-COVID market boom, when home prices were inflated and fixed mortgage rates were still climbing. According to CMHC analysts, this group is often characterized by:

• Minimal down payments
• High-ratio insured mortgages
• Stretching income to qualify under tougher stress tests
• Entering ownership straight from renting, with limited savings buffers

Some of these new buyers locked into 5.5%+ fixed rates in early 2023. Even as rates slowly ease now, many remain trapped in higher payments, limited equity, and little room for refinancing.

A senior CMHC economist warned:

“We’re seeing early indicators that some Canadians may have taken on more than they could comfortably afford — especially as inflation continues to affect core living costs.”

Who’s Feeling It the Most?

Renters who transitioned into homeownership without significant savings or family help appear to be the most vulnerable.
Delinquencies are rising fastest in Ontario and British Columbia, two of the country’s most expensive housing markets. Meanwhile, Quebec and parts of Atlantic Canada are reporting more stable performance among first-time borrowers.
According to broker reports, most delinquencies are occurring between 8–14 months after purchase, which suggests cash flow pressures are catching up shortly after the first-year honeymoon phase.

What Should You Do if You’re Struggling?

If you’re feeling stretched, CMHC encourages borrowers to:

• Reach out to your lender early — don’t wait until you miss a payment.
• Consider mortgage deferral or restructuring if available.
• Re-evaluate your budget and prioritize essential expenses.
• Explore a switch or refinance if lower rates become accessible and penalties are manageable.

Lenders are also required by the federal government to offer support options for borrowers in distress, though these vary by institution.
Interestingly, while delinquencies are rising among new buyers, CMHC data also shows that most new housing starts are focused on rentals, not ownership — explore the full rental housing shift here.

What This Means for the Market

The rise in early delinquencies may trigger some lenders to tighten underwriting policies — particularly for low-down-payment borrowers and those relying on gifted down payments.
“Rising delinquencies are part of a broader warning from CMHC about how elevated rates may intensify financial stress for households.”
Some analysts believe that rate relief in late 2025 could help reverse the trend, especially if the Bank of Canada follows through with anticipated rate cuts. However, for now, it’s a cautionary tale about the risks of stretching to buy during rate uncertainty.