Mortgage arrears outlook: resilient, but risks remain
“When the interest rates went way up, we thought we were going to see a huge spike [in arrears],” Matt Fabian (pictured top), TransUnion Canada’s senior director of financial services research and consulting, told Canadian Mortgage Professional.
“It was much less than we were bracing for, and certainly than a lot of the big banks and mortgage lenders were bracing for.”
But Canada’s housing market is a picture of different regions, and that’s equally the case when it comes to the mortgage stress outlook. Serious delinquency has risen by approximately 10 basis points year over year in Ontario, TransUnion Canada said, with BC seeing an increase of more than seven basis points.
Other provinces are faring better or have even improved, a difference that Fabian said reflected the much more prominent affordability pressures in Canada’s two most expensive housing markets.
“Home prices were higher in those markets historically,” he said. “So as mortgages come up for renewal, that payment shock becomes a lot more severe when you think about the size of the mortgage and the fact that a lot of people in those markets may have been renewing coming off a five-year term.
