Could the trade war worsen mortgage strain in Canada?
“When the first round of tariffs was outlined, we did some analysis about six months later,” Fabian told Canadian Mortgage Professional. “And it didn’t materially raise risk or delinquency at a national level, but we certainly did see some regional spikes.
“In pockets of Ontario where it was heavily concentrated in auto manufacturing, because of the layoffs that happened there, about six months later we did see a little bit of an increase in delinquency.”
That would likely worsen a trend that TransUnion has already noted: lower-risk borrowers are continuing to access credit from a position of strength, but a separate segment is facing mounting pressure from elevated costs and debt loads.
“We’re seeing kind of a bifurcation in the market,” Fabian said. “Affordability pressures are clearly influencing consumer behaviour. We’ve seen mortgage growth slowing slightly, and we’re also seeing a slight trend towards smaller mortgages.”
The areas at most risk of mortgage strain from the trade war
Ontario and Quebec, according to Fabian, are the provinces likely to see the highest degree of strain if tariffs on Canadian goods targeting auto, steel, and aluminium sectors produce the kind of layoffs that ripple through to mortgage payments.
