Mortgage arrears to rise further, but losses manageable: CIBC
Canadian mortgage delinquencies are likely to rise further as borrowers continue renewing at higher rates, but the resulting credit losses should remain manageable, according to new analysis from CIBC Capital Markets.
The report, authored by economists Benjamin Tal and Katherine Judge, says the financial strain caused by the mortgage-renewal cycle has yet to fully run its course. CIBC estimates the refinancing burden will not ease materially until February 2027.
Still, the economists found little evidence that mortgage stress is spreading into a broader deterioration in household credit. “Simply put, the credit quality position of Canadian households is surprising on the upside,” they wrote.
Renewal shocks push mortgage delinquencies higher
The share of mortgages at least 90 days past due has risen above its pre-pandemic level, as more borrowers renew at sharply higher rates. CIBC estimates that mortgages representing roughly 5% to 6% of the portfolio experienced payment increases of more than 40% in 2026.
At the same time, households have become more cautious about taking on new debt. Total household credit is growing at an annual rate of about 4%, close to the slowest pace on record outside the pandemic. Mortgage balances rose by roughly 2% year over year in August, the weakest growth in 25 years.
Financial strain is also showing up in insolvency filings, which have increased by about 6% over the past year. However, the overall insolvency rate remains near its 2019 level, and a larger share of cases are being resolved through consumer proposals rather than bankruptcies. Proposals accounted for 77% of filings, up from 60% in 2019.
Leading indicators point to manageable losses
Despite the rise in mortgage arrears, other measures of household credit quality have remained relatively stable. Average credit scores are slightly higher than before the pandemic and have edged up over the past year, while early-stage delinquencies among subprime borrowers remain just above 6%, slightly lower than a year earlier.
CIBC also found that 90-plus day delinquencies on credit cards and lines of credit held by mortgage borrowers have levelled off. Because financially strained households typically fall behind on unsecured debt before missing mortgage payments, the economists said these measures can provide an early indication of future mortgage performance.
Referring to the anticipated mortgage-payment cliff, Tal and Judge wrote: “A year into the cliff, we are still hard pressed to find any major vulnerabilities.”
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Last modified: October 27, 2026
