Canada mortgage arrears: Ontario reaches 0.32% in Q2 2026
Ontario mortgage arrears reached 0.32% in the second quarter of 2026 and CMHC expects further increases through mid-2027, with Alberta moving the other way.
The facts
- Ontario's mortgage arrears rate reached 0.32% in the second quarter of 2026, CMHC reported on 27 October in its Fall 2026 Residential Mortgage Industry Report, which counts a mortgage as in arrears at 90 days or more past due.
- Alberta stood at 0.27%, British Columbia at 0.26% and Quebec at 0.19% in the same quarter.
- Toronto rose from 0.24% to 0.33% over the year and Vancouver from 0.17% to 0.24%, while Edmonton fell from 0.31% to 0.29%.
- Mortgage investment entities reported arrears of 2.57%, against 0.28% at chartered banks and 0.14% at credit unions.
- Those private lenders hold 1.8% of all outstanding mortgage balances, measured in the first quarter of 2026.
- Variable-rate loans made up 36% of mortgage terms in June 2026 and fixed terms of three to under five years a further 39%.
What it means for your money
- Rising arrears widen discounts on forced sales. At 0.32% in Ontario supply stays thin, so the effect is on pricing power, not listings.
- Anyone already holding Canadian property carries the renewal question: CMHC says the largest renewal shock has passed, but five-year loans taken out in 2021 still reset at higher rates.
- Glopra data put the Canadian average at $4,585 per square metre against rent of $25.31 per square metre a month, a gross yield near 6.6%, which leaves room to absorb a higher arrears rate before income cover breaks.
- Private credit is where the strain concentrates: at 2.57% arrears against 0.28% at the banks, financing outside a chartered bank costs more in risk as well as in rate.
What to watch
- CMHC expects Ontario arrears to keep rising through mid-2027, a more moderate rise in British Columbia and Atlantic Canada, and stable or falling rates in Alberta and Saskatchewan, so the provincial split matters more than the national figure.
- With 36% of borrowers on variable terms, every policy-rate move reaches more than a third of the market within a quarter.
- Credit stress is showing first in auto loans, credit cards and lines of credit, which CMHC tracks as an early signal before mortgage arrears move.
Sources: Canada Mortgage and Housing Corporation https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2026/ontario-mortgage-arrears-expected-rise-through-mid-2027-cmhc; Canada Mortgage and Housing Corporation https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/research-reports/housing-finance/residential-mortgage-industry-report