The Mortgage Sector is Under Fire

😱 Mortgage Arrears Jump 47 percent

Source: Better Dwelling

The 411: Ontario mortgage stress is climbing fast, and the province’s arrears rate has now moved above the national average, a rare signal that has historically lined up with major housing downturns.

• Ontario mortgage arrears hit 6,223 in January, up 47.7% year over year and signalling rising borrower stress

• The arrears rate hit 0.29% in January, up 10 basis points year over year and the highest Ontario has seen since 2011

• That rate is nearly 5x higher than the 2022 low, showing just how quickly conditions have deteriorated since borrowing costs reset higher

• That crossover is rare and has only happened twice before in the data, once during the 1991 to 1996 real estate crash and again from 2005 to 2009 around the global financial crisis

• The current correction is already being described as Ontario’s second-largest, with pressure building as peak-era buyers, many of them investors, face a weaker market and tighter financing conditions

Why This Matters: It is not just that more borrowers are falling behind. It is that the province has now tripped a warning sign that has shown up during some of the ugliest stretches in its housing history.