Mortgage stress builds in Ontario and B.C. as origination growth slows

The share of mortgages falling seriously behind edged higher in the second quarter, with the sharpest increases by outstanding balance recorded in Ontario and British Columbia, according to TransUnion.

Nationally, the share of mortgage balances at least 60 days past due rose six basis points year over year to 0.31%. Ontario recorded the largest increase, rising 10 basis points to 0.41%, while B.C.’s rate climbed seven basis points to 0.28%.

The larger increase in balance-level delinquencies suggests financial stress is becoming more concentrated among borrowers with larger mortgages.

“Although mortgage delinquency rates remain low nationally, signs of credit stress are concentrated in higher-cost housing markets, where borrowers tend to carry larger mortgage balances and face greater exposure to affordability pressures and payment shocks,” said Matt Fabian, senior director of financial services research and consulting at TransUnion Canada.

Ontario’s account-level delinquency rate rose six basis points to 0.32%, the largest provincial increase, while B.C.’s rose four basis points to 0.27%.

By comparison, delinquency rates were stable or improving in several Prairie and Atlantic provinces. Quebec’s account-level rate was unchanged at 0.22%, while its balance-level rate declined one basis point to 0.17%.

TransUnion said borrowers who obtained mortgages during the rapid rise in interest rates in 2022 and 2023 continue to face greater affordability pressure and higher delinquency rates, particularly within the small subprime segment. Mortgages originated in 2024 have generally performed better.

Overall mortgage performance nevertheless remains strong, with 99.7% of mortgage holders current on their payments.

Mortgage originations lose momentum

The report also pointed to softer growth in new mortgage borrowing.

Originations increased 7.8% year over year in the second quarter, slowing from the double-digit growth recorded in recent quarters. TransUnion attributed the moderation to persistent affordability challenges, economic uncertainty and cautious consumer sentiment.

The average balance on a newly issued mortgage fell 2.4% to $354,683. That may reflect buyers purchasing less expensive homes, making larger down payments or moving to more affordable markets, the credit bureau said.

Meanwhile, total outstanding mortgage debt rose 3.9% to $1.93 trillion, even as the number of mortgage accounts declined 0.2%. The average outstanding balance increased 4.2% to $293,270.

Across all forms of consumer credit, outstanding debt reached a record $2.64 trillion, up 4.6% from a year earlier.

“Credit growth in the second quarter reflected a widening divide across risk tiers,” Fabian said.

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Last modified: August 26, 2026