RBC suggests those at greatest risk are borrowers who bought a home between late 2020 and early 2022, when interest rates were at their lowest. While variable-rate mortgage holders have already felt the pain of higher interest rates in many cases, RBC says this will “also become the reality for fixed-rate mortgage holders once their term expires.” While an expected rise in the unemployment rate is expected to reverse about half of the decline in mortgage delinquencies over the coming year, the RBC report notes that a combination of higher debt loads and higher interest rates, which have made Canadians “more interest rate-sensitive than ever,” will play a role too.Īs a result, delinquency rates are expected to continue trending higher into the medium to longer term “as earlier interest rate hikes and heavier debt-service loads catch up with financially-stretched mortgage holders.” Canadians more interest rate-sensitive than ever Among mortgage holders, the rise in non-mortgage delinquencies was up by 6% year-over-year.Īmong mortgages, delinquency rates remain just off all-time lows at 0.15% as of February, according to the Canadian Bankers Association, with rates highest in Saskatchewan (0.62%) and lowest in Quebec at 0.11%. “So, you can kind of roll forward six months and this is going to be the trend in mortgage delinquencies.”Ĭredit ratings agency Equifax Canada has also reported on rising non-mortgage debt delinquencies, which were up 11% in the fourth quarter of 2022. “What’s a much better indicator is looking at things like credit card delinquencies, definitely ticking up,” he said on a call for clients earlier this year. On top of that, mortgages aren’t considered delinquent until they are at least 90 days overdue. That’s because when a borrower loses their job, they typically have savings that can get them by for six months to a year, or get a mortgage refinance. Mortgage delinquencies, while rising slightly from their record low, are considered a backward-looking indicator, which tells us more about what was happening a year ago than it does today, Ben Rabidoux of Edge Realty Analytics has pointed out. The report points to rising delinquency rates for non-mortgage debts, such as credit cards, auto loans and lines of credit, which are often a precursor to mortgage delinquencies. Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at or hit reply to send us a note.Delinquency rates rising on non-mortgage debt, mortgages to follow Today’s Posthaste was written by Pamela Heaven, with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg. The best tax option will allow you to take advantage of every new deduction and credit, and will ensure you’re doing your taxes right the first time, and on time. It will soon be tax time and our content partner MoneyWise can help you wade through the plethora of tax software options whether you are a student who needs the cheapest option or a small business owner who needs a lot of help.
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