February 3, 2026
Canadian households are starting to feel the strain of higher borrowing costs, and the country’s major banks are seeing it show up in their books. New data from the Canadian Bankers Association (CBA) reveals that the national mortgage arrears rate increased again in November, reaching its highest level in five years.
While the increase was modest on a month-to-month basis, it marks a notable shift in trend. Excluding the temporary spike during the early pandemic period, mortgage delinquency is now higher than at any point since before COVID. At the same time, banks are carrying fewer total mortgages, meaning each delinquent loan now represents a larger risk to lenders.
Canadian Mortgage Arrears Are Rising From Historic Lows
The national mortgage arrears rate – which tracks the share of mortgages that are at least 90 days past due – climbed to 0.25% in November 2025, up roughly 4 basis points year-over-year.
That makes it the highest reading since August 2020, when emergency job losses temporarily pushed delinquencies higher. Outside of that brief pandemic shock, the current level is the highest since 2017.
While the arrears rate remains low in absolute terms, it is moving in the wrong direction after years of record stability.
Mortgage Arrears Rate (Canada)
- November 2023: 0.17%
- November 2024: 0.21%
- November 2025: 0.25%
(Source: CBA; Better Dwelling)
Delinquent Mortgage Counts Are Climbing
Looking beyond percentages, the number of actual delinquent mortgages tells a clearer story.
Canadian banks reported 12,380 mortgages that were at least 90 days past due in November, up 1.2% from October and 18.1% higher than a year earlier.
That is the largest volume of delinquent mortgages since mid-2020, and again, excluding the pandemic period, the highest level since 2017.
Mortgages 90+ Days Past Due
- November 2023: 8,560
- November 2024: 10,480
- November 2025: 12,380
This reflects a steady erosion in household financial stability as mortgage renewals continue at significantly higher interest rates.
Falling Mortgage Counts Are Making The Problem Worse
What makes this cycle unusual is that banks are not offsetting rising delinquencies with new mortgage growth.
Total mortgages held by Canadian banks fell to 4.96 million in November, down:
- 0.11% month-over-month
- 0.97% year-over-year
- Nearly 3% below the July 2022 peak
This means:
There are fewer mortgages on bank balance sheets, but more of them are going bad.
In practical terms, each delinquent mortgage now carries greater financial impact for lenders than in previous cycles.
Why Are Banks Holding Fewer Mortgages?
It is highly unusual for Canadian banks to see their mortgage portfolios shrink. Historically, total mortgage counts rise almost every year.
The decline is not being driven by mass defaults, and outstanding mortgage debt is still growing nationally. Instead, the data suggests a shift in who is holding the risk.
One likely explanation is that non-bank lenders (B-lenders and private lenders) are absorbing a larger share of new and higher-risk loans.
Banks often:
- Decline renewals on weaker borrowers
- Sell underperforming loans
- Push riskier files toward alternative lenders
When a loan defaults at a non-bank institution, it does not appear in national banking statistics, making systemic risk less visible.
Mortgage Stress Is A Regional Problem
The arrears issue is not evenly distributed across the country.
According to CBA and Better Dwelling analysis:
- Ontario and British Columbia are driving most of the increase in arrears
- Atlantic Canada has seen a more modest rise
- Alberta’s arrears rate is still falling, supported by stronger employment and income growth
This aligns closely with where affordability pressures are most extreme and where home prices surged the most during the pandemic.
What This Signals For The Housing Market
The current arrears rate is not yet a crisis, but it is a clear warning sign.
Mortgage delinquencies typically rise:
- After prolonged high interest rates
- During renewal waves
- When household savings are depleted
Canada is now experiencing all three at once.
What This Means Going Into 2026
For homeowners:
- Renewals at higher rates remain the biggest risk
- Variable-rate borrowers continue to face payment shock
- Household budgets are under growing pressure
For lenders:
- Credit risk is increasing
- Fewer mortgages + more delinquencies amplifies exposure
- Non-bank lending is masking some systemic stress
For the housing market:
- Rising arrears often precede slower price growth
- Distressed listings may increase in select regions
- Ontario and BC remain the most vulnerable markets
The Bottom Line
Canada’s mortgage system is beginning to show early-stage financial stress.
Arrears remain low compared to historical crisis levels, but the direction of change matters more than the level itself.
With:
- Mortgage counts shrinking
- Delinquencies climbing
- Renewals still ahead
Canada’s housing slowdown is now shifting from a price problem to a household solvency problem.
References
Canadian Bankers Association. (2026). Mortgage arrears statistics, November 2025. CBA. Welcome to the Canadian Bankers Association website
Better Dwelling. (2026). Canadian Mortgage Arrears Rate Hits A 5-Year High – Better Dwelling
Canadian Bankers Association. (2025). Residential mortgage market report. CBA. Welcome to the Canadian Bankers Association website
Canada Housing Market 
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