Mary Carey

Key developments in Canada’s residential mortgage market in 2025 and the outlook for 2026:

• In 2025, the mortgage market activity was dominated by renewals of existing mortgages, rather than new mortgages taken out by homebuyers.
• Renewal volumes are expected to ease in 2026. Borrowers renewing after a 5-year term are likely to face a similar interest-rate shock as those who renewed in 2025.
• Insured mortgage activity increased compared to uninsured lending. New eligibility rules made it easier for first-time homebuyers and new home buyers to qualify for mortgage insurance.
• The national 90+ days mortgage delinquency rates increased in 2025. The increase was largely concentrated in Ontario, especially Toronto, where households faced growing payment pressures.
• Despite the increase, 90+ days delinquency rates remain low by recent standards. Delinquencies on non-mortgage products – often a predictor of mortgage defaults – are rising but at a slower pace.
• Canada’s residential mortgage debt exceeded $2.4 trillion in December 2025, reaching a new high.
• Overall, borrower stress is increasing due to softer labour-market conditions and accumulated exposure to higher interest rates. The system is more rate-sensitive, but remains structurally stable.

Key trends to watch

The following factors may influence the performance of Canada’s residential mortgage market in the coming years:

• Upcoming renewal cycles, particularly borrowers rolling into new rates through 2026–27.
• Labour market conditions, given their close relationship with arrears.
• Shifts in insured mortgage activity, including amortization trends and eligibility effects.
• Performance of nonbank lenders, especially where borrower profiles differ from banks.

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