Aug 29, 2026
For more than a decade, Ontario homeowners could count on one reassurance: Whatever mortgage stress showed up in the national numbers, the province usually did a little better than average. That streak just ended.
New data from Canada Mortgage and Housing Corporation (CMHC) show the national mortgage delinquency rate fell to 0.22% in the second quarter of 2025 — the first quarterly drop in three years. In Ontario, that mortgage delinquency rate climbed to 0.23%, pushing it above the national average for the first time since at least 2012.
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The gap is starkest in Toronto, where the delinquency rate jumped 60% year-over-year from 0.15% to 0.24%. It’s the first time in more than a decade that Toronto’s mortgage default rate has been higher than the national average.
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At the same time, data from this CMHC report shows that a decline in national mortgage loan defaults was led by lower delinquency rates in Atlantic Canada, Quebec and the Prairie provinces.
Despite household budgetary pressures and ongoing economic insecurity, this CMHC report clearly shows that Canada isn’t in a mortgage crisis — it’s a distinctly Ontario problem.
Here’s what’s behind the shift, who it affects most and what to do if your mortgage renews soon.
Why Ontario is the outlier
While British Columbia homeowners are moving in the same direction as Ontario, BC’s delinquency rate didn’t rise as sharply — increasing from 0.16% to 0.19% year-over-year.
In Ontario, the housing sector leading the delinquency rate rise is the Toronto condominium market. CMHC’s own housing research notes that Toronto-area condo sales have declined, inventories have risen, and a growing number of investors are under financial strain as prices fall.
The report authors point out that today’s market differs from the downturn of the 1990s — when lending rules were not as strict. Tougher loan regulations combined with a structural housing shortage mean the city isn’t overbuilt the way it was three decades ago.
The inherent problem is that buyers who locked in at near-record low rates after buying in the early-2020s are now feeling the pinch as those mortgages come up for renewal at today’s higher cost of borrowing. Some absorb those extra costs; others sell, while others end up defaulting on their mortgage.
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Renewals are making the timing worse
About 60% of all outstanding mortgages in Canada will renew in 2025 or 2026, and roughly 60% of those are expected to see a payment increase, according to the Bank of Canada’s 2025 Financial Stability Report. The Bank notes most affected borrowers already have income growth, savings or home equity to absorb the increase, since these mortgages were stress-tested when originated.
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Still, homeowners in higher-priced markets like Toronto, where mortgage balances run larger, even a moderate rate increase can mean a payment jump of several hundred dollars a month — and homeowners whose home equity has shrunk at the same time as costs have increased have less room to refinance their way out of the problem.
What to do before you fall behind
If you’re worried about keeping up with a renewal, the Financial Consumer Agency of Canada (FCAC) recommends contacting your lender before you miss a payment, not after. Federally regulated banks are expected to offer relief measures to homeowners showing early signs of financial stress, including waiving prepayment penalties, not charging interest on interest, or extending amortization for the shortest period possible.
Those approaching a renewal should start comparing mortgage rates as soon as possible — ideally two or three months before the renewal deadline date. If you find a good rate, go through pre-approval and get the rate in writing. Most lenders will lock in a pre-approved rate for 30 to 180 days.
For those facing the uncertainty of higher mortgage payments and negative cash-flow property, consider your options for selling. Remember, a sale you initiate will always be more favourable than a forced sale by a lender or court-ordered sale.
Bottom line for Ontario homeowners
Ontario is no longer the mortgage market’s steady middle ground. With delinquencies above the national average for the first time in more than a decade, homeowners renewing in the next year — particularly in Toronto — should treat their renewal date as a deadline for action, not a formality. Reaching out to a lender early remains the most effective way to keep a temporary cash squeeze from turning into a missed payment.
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Romana King, Senior Editor at Money.ca, also writes for various North American publications and the RKHomeowner blog. Her book, House Poor No More, is an Amazon bestseller and five-time award winner, including the 2022 New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award.
