Homeowners Increase Mortgage Switching As Consumer Debt Piles Up

June 5, 2026

The 90-plus-day delinquency rate for mortgage and non-mortgage debt has ticked up significantly in 2025 according to the Canada Mortgage and Housing Corporation (CMHC).

Although the delinquency rate is still historically low, very noticeable upwards trends can be seen especially here in Ontario, which notched a remarkable 35% increase in mortgage debt and a 10% rise in non-mortgage debt year over year. Nationwide, Canadians’ debt increased by 3.13% year over year per Equifax, significantly outpacing real growth in GDP and disposable personal income. Young consumers, categorized as 26 to 35 years old, are showing the highest delinquency rate and the largest decrease in credit health. 

Last year’s wave of mortgage renewals has lead to some payment shock among consumers as they cope with the higher rates. Mortgage balances are high and the burden is particularly pronounced on first-time homebuyers, whose average new loan size increased by 5% year over year according to Equifax. These factors among others continue to keep many prospective homebuyers on the sidelines. 

Resultantly, consumers are switching between lenders more often as they seek lower rates to increase their room for discretionary spending and ability to pay off their non-mortgage debt. This economic climate shows that it’s more important than ever to work with a mortgage professional to get the lowest possible rates and to receive long-term counselling for repaying mortgage and non-mortgage debts.

The Bank of Canada’s post-pandemic rate hike cycle is largely to blame for the expanding consumer debt. While there were worries that the central bank would hike its policy rate this year in the face of oil-driven inflationary pressures, that has changed after Canada entered a technical recession.

Sources: Canada Mortgage and Housing Corporation’s Residential Mortgage Industry Report Spring 2026 Edition. Equifax® Canada Market Pulse Quarterly Consumer Credit Trends, Q4 2025.