Mortgage Arrears on the Rise: Canada Sees Uptick in Missed Payments in 2025

Canada’s mortgage delinquency rate is creeping higher in 2025, particularly among homeowners who purchased during the peak-rate years of 2022 and 2023. According to the latest lender data, more borrowers are falling behind on payments — especially in Ontario and British Columbia — raising red flags about financial strain as monthly obligations remain elevated.
While the national arrears rate is still well below historical highs, the upward trend is enough to worry policymakers and economists. Mortgage brokers are also reporting a spike in renewal anxiety, especially among borrowers whose fixed terms are ending and who now face refinancing at much higher rates.

“For those still in a strong financial position, paying off your mortgage early could be a smart hedge against rising delinquency risk.”

Why Are More Canadians Missing Payments?

Several factors are contributing to the rise in arrears:

• Many homeowners stretched themselves to qualify during the real estate boom, and now face payments hundreds of dollars higher than expected.
• Renewals in 2025 are often triggering “payment shock” as households move from 2–3% rates to 5–6%.
• Sluggish wage growth and rising cost of living are leaving little room for error in many budgets.

According to a leading credit agency, the delinquency rate on prime mortgages rose to 0.26% nationally in Q2 2025 — up from 0.18% a year ago. In non-prime lending segments, including B-lender mortgages, the arrears rate is over 1.2%.

Provincial Breakdown: Where the Stress Is Highest

“If you’re among the growing number of Canadians falling behind, here’s what really happens when you miss a mortgage payment.”

What Borrowers Can Do

Mortgage brokers say the key is early action. If your renewal is coming up or you’ve already missed a payment, options are still available. Some lenders may offer extensions, blended rates, or payment deferral solutions — but you’ll need to act before your mortgage becomes too delinquent to negotiate.