A growing number of Canadians could face difficulties making mortgage payments when they renew their loans this year and next, according to the Canada Mortgage and Housing Corp. (CMHC). The housing agency says it is monitoring the situation closely as higher interest rates push monthly payments higher.
“My overall expectation is that delinquencies and arrears will be trending upwards,” Aled ab Iorwerth, deputy chief economist with CMHC, told CTV News. (1) He added that the higher mortgage costs could put downward pressure on the economy as households adjust.
Mortgage delinquencies remain low by historical standards but are on the rise. In 2022, Canada’s mortgage delinquency rate fell to 0.14%, according to CMHC citing Equifax Canada data. It rose slightly to 0.22% in the second quarter of 2025, compared with a high of 0.38% in 2012.
“While the number of mortgage delinquencies and arrears are at historically low levels, we have observed a sharp increase in some parts of the country,” Iorwerth said.
Higher rates are hitting home budgets across Canada
Interest rates for homes and condos are estimated to be about three percentage points higher than five years ago. The increase could affect Canadians who purchased homes during the pandemic when rates were exceptionally low.
Approximately two million mortgages are coming up for renewal this year and in 2026, according to CMHC. A July analysis from Bank of Canada staff suggests that 60% of outstanding mortgages will renew with higher payments. Most of these are five-year, fixed-rate mortgages.
“The general economic slowdown means companies will do less investing and hiring, which adds to the financial strain for some homeowners,” Iorwerth said. He also highlighted the effect on housing supply, noting that builders may be hesitant to start new projects, potentially driving up home prices in the future.
TD Bank economist Maria Solovieva offered a more measured view, pointing out that overall mortgage payments have been declining due to lower interest rates on some loans. Her July report (2) noted that mortgage interest payments fell by an average of 1.7% in the last two quarters of 2024.
Condo owners face a renewed financial squeeze
CMHC is especially concerned about condo owners in Toronto who bought during the 2020-21 pandemic when rates were low. Condos were often more affordable than houses, and buyers generally took five-year terms. These owners now face much higher payments on renewal. High local unemployment adds to the challenge.
“It’s incredibly hard to get ahead, so to be able to keep up with this cost of living, people are forced to carry balances on their lines of credit, on their credit cards,” Shael Weinreb, CEO and founder of The Home Equity Partners in Toronto, told CTV.
Other major cities such as Vancouver and Montreal will experience similar pressures, although to a lesser extent, according to Iorwerth. Provinces with stronger economies, including Alberta, are thought to have more capacity to absorb these delinquencies.
How homeowners can prepare for higher payments
For homeowners approaching mortgage renewal, experts suggest reviewing finances early, comparing rates from multiple lenders and considering ways to reduce overall debt. Those struggling may also explore options such as refinancing, extending amortization periods or speaking with a financial advisor to avoid missed payments.
Understanding the local housing market and interest rate trends can help Canadians navigate renewals with fewer surprises. Awareness and preparation remain key to staying on top of payments as rates shift.
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