Stable versus Struggling: Canada’s Financial Divide Widens
- Mortgage Delinquencies Rising in Ontario Amidst Rising Consumer Debt -
Equifax Canada Market Pulse Quarterly Consumer Credit Trends Report
TORONTO, Feb. 25, 2025 (GLOBE NEWSWIRE) -- A growing financial divide is emerging across Canada, with some borrowers benefiting from lower interest rates while others struggle under mounting debt. According to Equifax Canada’s Q4 2024 Market Pulse Consumer Credit Trends Report, some Ontario mortgage holders are experiencing severe financial distress, with delinquencies more than 50 per cent higher than pre-pandemic levels.
Total consumer debt in Canada reached $2.56 trillion at the end of 2024, a 4.6 per cent increase over 2023. Non-bank auto loans drove much of this increase, rising 11.7 per cent year-over-year, while the average non-mortgage debt per consumer reached $21,931, exceeding pre-pandemic levels.
“While some consumers are doing better and seeing financial improvements from lower interest rates, financial pressures have intensified for some Canadians, as well as mortgage holders in certain regions, in particular in Ontario and British Columbia,” said Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada. “At first glance, the numbers are not concerning, but when we look deeper at a more granular level, many are feeling the strain of high living costs and mortgage renewals with higher payments, while other consumers are doing better and seeing financial improvements from lower interest rates and income growth.”
For some homeowners, rate cuts have provided some relief. Some borrowers with home equity lines of credit have seen delinquency rates stabilize. Many of these consumers have improved their credit card repayment habits, with more people paying off balances in full.
Ontario Mortgage Holders Under Pressure and Missing Payments
More than 11,000 mortgages in Ontario recorded a missed payment in Q4 2024 — nearly three times the number seen in 2022. Mortgage holders who are falling behind in their payments are also carrying substantially higher mortgage balances, reflecting the continued financial strain of higher than pre-pandemic interest rates. The 90+ day mortgage balance delinquency rate in Ontario surged 90.2 per cent year-over-year to 0.22%, far outpacing the change in delinquency rates in other provinces, with BC at 37.7 per cent, Alberta at -3.6 per cent, Quebec at 41.2 per cent, the Prairies (MB and SK) at 0.6 per cent, and the Atlantic provinces (NL, PE, NB, NS) at 15.7 per cent.
Ontarian mortgage holders are struggling with other forms of debt as well. The 90+ day non-mortgage balance delinquency rate jumped 46.1 per cent from Q4 2023, while other provinces saw smaller rate jumps, with BC at 21.6 per cent, Quebec at 23.3 per cent, Alberta at 6.1 per cent, the Prairies (MB and SK) at 4.1 per cent, and the Atlantic provinces (NL, PE, NB, NS) at 1.5 per cent. In addition, Ontario’s overall rise in non-mortgage delinquency rate was 23.9 per cent, above the national average of 18 per cent.
“Mortgage holders will typically do everything they can to keep up with payments,” Oakes explained. “The fact that we’re seeing missed payments rise so sharply suggests deeper financial strain. Depending on the type of credit, missed payments have increased from 10 to 80 per cent, compared to pre-pandemic levels.”
In Toronto, 90+ day non mortgage delinquency rates hit 2.06 per cent, higher than most major cities, reflecting the region’s unique financial challenges.
Canadian Housing Market: Rebound Tempered by Renewal Challenges
The overall Canadian mortgage market showed signs of recovery, with new mortgage originations rising 39 per cent year-over-year. First-time homebuyers returned, with a 28.2 per cent increase from the extreme lows of purchases in Q4 2023. Although the average loan amount for first-time buyers remains 6.6 per cent higher than Q4 2023, monthly payments have decreased 7.9 per cent, or $200 lower, to an average loan amount of $2,330.
Mortgage renewals and refinancing accounted for over 50 per cent of new mortgage originations in Q4 2024, increasing 10.6 per cent from 2023. The average loan amount and balance on mortgage renewals in 2024 surpassed those in 2023 and 2022, with the average balance increasing by 2.9 per cent in 2024 compared to 2023.
Many consumers renewing their mortgage continue to have higher monthly payments due to elevated interest rates compared to pre-pandemic and pandemic levels, when they last locked in their low rates. This reality is expected to affect around a million mortgages due for renewal in 2025, originating from the low-interest-rate environment of 2020. These borrowers may face significantly higher payments despite recent rate reductions. A quarter of mortgage-holders saw their monthly mortgage payment increase by over $150 at renewal in Q4 2024.
Consumer Spending and Credit Behaviour
Credit card debt climbed 7.8 per cent in Q4 2024, though at the slowest rate since 2022. Seasonal spending in December hit a two-year high, with average credit card purchases adjusted for inflation reaching $2,228 per cardholder, a 2.2 per cent increase from 2023.
Younger and lower income Canadians are experiencing missed payments on credit cards, auto loans, and lines of credit, signaling financial strain among these groups.
“Despite recent rate cuts and GST tax relief, challenges persist for certain consumers, particularly in consumer debt and housing. The added uncertainty of U.S. tariffs underscores the need for a balanced approach to debt, affordability, and trade. The coming year will be critical for Canada's economic stability,” said Oakes.
Age Group Analysis – Debt & Delinquency Rates (excluding mortgages)
| Average Debt (Q4 2024) | Average Debt Change Year-over-Year (Q4 2024 vs. Q4 2023) | Delinquency Rate ($) (Q4 2024) | Delinquency Rate ($) Change Year-over-Year (Q4 2024 vs. Q4 2023) | ||
| 18-25 | $8,483 | 3.84% | 1.92% | 15.17% | |
| 26-35 | $17,467 | 0.87% | 2.24% | 21.24% | |
| 36-45 | $27,042 | 1.96% | 1.85% | 23.20% | |
| 46-55 | $34,564 | 3.71% | 1.33% | 19.04% | |
| 56-65 | $28,714 | 5.53% | 1.11% | 14.26% | |
| 65+ | $14,635 | 3.82% | 1.11% | 5.55% | |
| Canada | $21,931 | 2.98% | 1.53% | 17.98% | |
Major City Analysis – Debt & Delinquency Rates (excluding mortgages)
| City | Average Debt (Q4 2024) | Average Debt Change Year-over-Year (Q4 2024 vs. Q4 2023) | Delinquency Rate ($) (Q4 2024) | Delinquency Rate ($) Change Year-over-Year (Q4 2024 vs. Q4 2023) | |
| Calgary | $24,078 | 0.81% | 1.67% | 16.23% | |
| Edmonton | $23,665 | -0.22% | 2.17% | 19.00% | |
| Halifax | $21,278 | 1.46% | 1.53% | 21.37% | |
| Montreal | $17,057 | 3.16% | 1.43% | 20.48% | |
| Ottawa | $19,634 | 1.75% | 1.47% | 24.45% | |
| Toronto | $21,054 | 3.34% | 2.06% | 23.75% | |
| Vancouver | $23,251 | 4.12% | 1.24% | 15.81% | |
| St. John's | $23,968 | 1.02% | 1.47% | 3.62% | |
| Fort McMurray | $37,861 | 0.26% | 2.41% | 11.72% | |
Province Analysis - Debt & Delinquency Rates (excluding mortgages)
| Province | Average Debt (Q4 2024) | Average Debt Change Year-over-Year (Q4 2024 vs. Q4 2023) | Delinquency Rate ($) (Q4 2024) | Delinquency Rate ($) Change Year-over-Year (Q4 2024 vs. Q4 2023) | |
| Ontario | $22,597 | 3.51% | 1.64% | 23.91% | |
| Quebec | $19,156 | 2.83% | 1.08% | 16.88% | |
| Nova Scotia | $21,349 | 2.45% | 1.66% | 9.28% | |
| New Brunswick | $21,548 | 2.71% | 1.68% | 5.80% | |
| PEI | $23,664 | 3.44% | 1.23% | 14.34% | |
| Newfoundland | $24,843 | 3.82% | 1.49% | 0.05% | |
| Eastern Region | $22,272 | 2.88% | 1.59% | 6.32% | |
| Alberta | $24,537 | 0.74% | 1.91% | 17.11% | |
| Manitoba | $18,150 | 2.64% | 1.69% | 3.14% | |
| Saskatchewan | $23,265 | 2.29% | 1.77% | 11.09% | |
| British Columbia | $22,583 | 3.61% | 1.36% | 14.16% | |
| Western Region | $22,911 | 2.34% | 1.64% | 14.09% | |
| Canada | $21,931 | 2.98% | 1.53% | 17.98% | |
* Based on Equifax data for Q4 2024
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