Ontario Homeowners Are Feeling the Pinch:
A new report from Equifax Canada has revealed a troubling trend in Ontario’s housing market, the province’s mortgage delinquency rate has nearly doubled over the past year. Rising borrowing costs and increased financial strain have led to a significant uptick in missed mortgage payments, highlighting the challenges many homeowners are facing.
A Sharp Increase in Mortgage Delinquencies
According to Equifax’s credit report for the fourth quarter of 2024, Ontario’s mortgage delinquency rate—which tracks the number of mortgages in arrears—rose by a staggering 90.2% compared to the same period in 2023. This increase pushed the rate to 0.22%, a recent high.
Ontario’s delinquency rate climbed more sharply than any other province, outpacing British Columbia (up 37.7%) and Quebec (up 41.2%). The data also revealed that over 11,000 Ontario mortgages recorded a missed payment in the final quarter of 2024—nearly three times the number recorded in 2022.
Why Are More Ontarians Struggling with Mortgage Payments?
Many homeowners initially secured low interest rates during the pandemic era, particularly in 2020, when borrowing costs were at historic lows. However, as these mortgage terms expire, borrowers are facing significantly higher renewal rates. Equifax’s data shows that the average loan amount and balance on mortgage renewals in 2024 were already higher than in 2023 and 2022. With approximately one million mortgages set to renew in 2025, many homeowners will likely encounter further financial strain as they adjust to increased monthly payments.
Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada, emphasized the seriousness of the situation, stating, “Mortgage holders will typically do everything they can to keep up with payments. The fact that we’re seeing missed payments rise so sharply suggests deeper financial strain.”
Financial Struggles Beyond Mortgages
The financial challenges facing Ontarians extend beyond their mortgage payments. Equifax’s report highlights that the province’s 90-day delinquency rate on non-mortgage debt increased by 46.1% in the last quarter of 2024. In Toronto specifically, the 90+ day delinquency rate reached 2.06%, surpassing most major Canadian cities.
Additionally, total Canadian consumer debt increased by 4.6% year-over-year to reach $2.56 trillion. Credit card debt alone climbed 7.8% in 2024, and non-bank auto loans surged 11.7%. These trends indicate a broader financial squeeze on Canadian households, exacerbated by inflation and rising costs.
Potential Economic Challenges Ahead
Future financial pressures could worsen if international trade tensions escalate placing further economic strain on Canadian households and businesses.
Equifax’s report also highlights a growing financial divide. While some borrowers have struggled to keep up with rising mortgage costs, others have managed to stabilize their payments using home equity lines of credit (HELOCs). This divide suggests that while some homeowners can leverage financial tools to manage debt, others may be at greater risk of financial hardship.
Tips for Homeowners: Preparing for Mortgage Renewal and Avoiding Default
With mortgage renewal challenges ahead, homeowners can take proactive steps to ease the financial burden and reduce the risk of mortgage default:
1. Start Planning Early
- Review your current mortgage terms and renewal timeline at least six months in advance.
- Research interest rate trends and consult a mortgage broker for advice on the best renewal options.
2. Assess Your Financial Situation
- Calculate your expected monthly mortgage payment under current interest rates.
- Create a detailed budget to determine where you can reduce expenses and increase savings.
3. Consider Different Mortgage Products
- Explore fixed-rate versus variable-rate mortgages based on your risk tolerance.
- If you anticipate financial struggles, consider extending your amortization period to lower your monthly payment.
4. Build an Emergency Fund
- Set aside savings to cover at least three to six months’ worth of mortgage payments.
- If possible, pay down high-interest debt (such as credit cards) to improve cash flow.
5. Talk to Your Lender Early
- If you anticipate difficulty making payments, reach out to your lender as soon as possible.
- Many lenders offer options such as payment deferrals, mortgage restructuring, or interest-only payments for temporary relief.
6. Consult a Real Estate Professional
- If keeping up with mortgage payments is becoming unsustainable, a real estate agent can help assess the value of your home and guide you through selling it strategically.
- Selling before defaulting can help you preserve your financial health and allow for a smoother transition into a more affordable housing situation.
7. Look into Government and Financial Assistance Programs
- Check if you qualify for federal or provincial homeowner assistance programs.
- Some financial institutions offer hardship programs for borrowers facing temporary financial distress.
Final Thoughts
As Ontario homeowners face rising mortgage costs and economic uncertainty, staying informed and proactive is crucial. The sharp increase in mortgage delinquency rates underscores the importance of financial planning, budgeting, and exploring available resources to avoid mortgage default.
If you’re preparing for a mortgage renewal in 2025, now is the time to assess your options and take steps to secure your financial future.
If you are thinking of making a move, or have questions about the real estate market in Windsor or Essex County, reach out to the professionals at The Dan Gemus Real Estate Team Ltd., Brokerage, serving and supporting all of Windsor and Essex County, ON.
At The Dan Gemus Real Estate Team Ltd. Brokerage, we specialize in helping Windsor and Essex County homeowners sell faster and for top dollar. Whether you need advice on prepping your home for sale, timing the market, or if you are ready to list, we’re here to guide you through every step.
About The Dan Gemus Real Estate Team
The Dan Gemus Real Estate Team is a top trusted real estate team located in the heart of Windsor and Essex County, ON, offering exceptional service and expertise with helping clients successfully buy and sell homes and navigate the homebuying and selling process in Windsor and Essex County with ease. With a proven track record of success and deep roots in the community, The Dan Gemus Team is committed to helping clients moving in Windsor and Essex County achieve their real estate goals with integrity, professionalism, and a client-first approach. Whether you’re thinking of buying, selling, or investing, we’re here to guide you every step of the way. Tune in to The Dan Gemus Real Estate Show for expert insights and Windsor and Essex County market updates, and don’t forget to explore our exclusive VIP Perks Program, offering incredible discounts and benefits from local businesses. Discover how we can make your real estate journey exceptional at dangemus.com.
This blog is intended for informational purposes and not intended to solicit those under contract with another brokerage.
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