Equifax overhauls broker credit report, moves to soft inquiry

Equifax Canada is overhauling the credit report mortgage brokers rely on, adding new fraud, income and insolvency indicators and moving to a soft credit inquiry.

“Risking a borrower in 2026 does not look the same as risking a borrower in 2016, in 2019 and in 2020,” Lindsay Zwart, director of solutions, mortgage and housing at Equifax Canada, said during a presentation at a mortgage industry event in Toronto on Wednesday.

Zwart said the changes to the Mortgage Broker Report are the most significant the company has made, but the biggest news came at the end of her presentation.

“In the very short term, we will be transitioning to a soft inquiry on the mortgage broker report,” she said. “This will cause sort of a significant difference and a significant opportunity as you’re dealing with that more complex client.”

A changing credit landscape

Zwart said the upgrades were made in response to a borrower profile that has shifted considerably in recent years.

For example, first-time buyers are increasingly relying on family. Zwart said the share of mortgages where co-borrowers are about 20 years apart in age, indicating a likely parent or family member, has doubled since 2016. Equifax’s Q2 data showed joint mortgages among first-time buyers rose to 70.9%, with a higher reliance on co-borrowers in Ontario and B.C.

Mortgage choices are also changing, according to Zwart, with 73% of the mortgages Equifax sees now either variable-rate or shorter-term, compared with 27% on a five-year fixed. “Instead of the great renewal, I think forward-looking, we need to be looking at the constant renewal,” she said. “You’re going to be renewing on a very regular basis now.”

She also noted the challenges that could arise as average property values decline, with prices down about 3% nationally.

“I started in the lending space in 2005, and I don’t believe, save for maybe two quarters in 2008 and 2009, that we would have seen any price contraction,” she said. “This is a brand new behaviour for anybody that is currently purchasing a home.”

Lenders are now assessing borrowers against the risk of negative equity and higher loan-to-value ratios, Zwart said, which can leave some borrowers unable to refinance.

Signs of stress are also building. Equifax’s Q2 data showed the 90-plus-day mortgage delinquency rate by balance rose to 0.30%, up 33.8% from a year earlier. Among mortgage holders, severe non-mortgage delinquencies rose 12.5% year over year nationally and 27% in Ontario.

“Canadians tend to pay the mortgages first,” Zwart said, noting that financial stress therefore tends to appear first in credit cards, lines of credit and auto loans.

She also noted that insolvencies are at their highest rate since 2009, with a “drastic increase” among homeowners.

Fraud is another growing concern, especially in B.C. and Quebec. Zwart said falsified financials and documents are the main drivers of mortgage fraud, most often committed by people between the ages of 26 and 45.

What’s changing in the report

Zwart said the redesign is meant to make risk easier to spot. “This is not a scavenger hunt for you,” she said.

The first page now shows what Zwart called three potential “deal killers”: fraud risk, consumer credit strength and insolvency or bankruptcy risk.

A new fraud pre-screen indicator, available only to brokers and not passed on to lenders, flashes green or yellow. A yellow flag means the credit file shows behaviour associated with fraud perpetrators or victims, often related to identity management or unusual payment patterns.

Zwart said brokers can often resolve an alert by checking the date of birth, address, inquiries and employment on the file against what the client has told them. Brokers can also meet the client in person, request an extra piece of ID and document what they find.

“If it’s alerting for us, it’s going to alert on your lender’s fraud risk screening as well,” she said. “So why not get in front of it and eliminate some of the back and forth?”

A second new indicator flags borrowers whose income Equifax has already received directly from payroll providers. Zwart said that happens on about one in 10 files. Some lenders connected to Equifax may be able to use it instead of collecting income documents.

Equifax has also enhanced its Bankruptcy Navigator Index (BNI), which predicts the likelihood of insolvency over the next 24 months. The index now includes trended data and mortgage payment behaviour. Like a FICO score, a higher score means lower risk, and most Canadians score high. “If it’s a low score, please pay attention,” Zwart said.

She added the BNI can also support a borrower on the cusp of qualifying with an A lender. A strong score gives the broker a rationale for submitting the file there, while a weak score lets the broker raise the issue with the client before the lender does.

Zwart said brokers’ alternative-lending business, once about 8% to 10% of a typical book, could now reach 30% or more, making these tools increasingly important.

“As a broker,” she said, “your two most valuable currencies are your time and your reputation in the industry and with your lenders.” The updated report, she said, is intended to help brokers with both.

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Last modified: September 23, 2026