Most borrowers manage their repayments well
Notwithstanding skyrocketing interest rates, most Canadians pay their mortgages consistently—and on time, according to the latest data released by the Canadian Bankers Association (CBA).
The CBA data showed that as of May 2024, around 9,500 residential mortgages were in arrears, with payments overdue by three or more months. This number represents less than one percent (0.19%) of over five million total mortgages in Canada, reflecting a slight increase from the historic lows of 2022.
“Canadians are also careful borrowers and this is evident when looking at national mortgage delinquency rates in Canada that show that more than 99% of mortgage holders in Canada are in good standing,” the CBA stated on its website.
Most Canadians have been able to keep their arrears at the lowest rate possible even despite the COVID-19 pandemic and economic turmoil of recent years, the CBA said.
Meanwhile, the CBA report also indicated that mortgage delinquencies are more prevalent and rising faster at small and medium-sized banks. The CBA data also reflected mortgage information from large lenders, including the Big Five banks.
When it comes to areas in the country with the greatest number of arrears or defaulted mortgage payments, Saskatchewan topped the list: 0.56% of homeowners there had overdue mortgage payments, or 705 out of 126,031 homes. This was followed by the Province of Alberta with 0.31% of 589,033 homeowners (the equivalent of 1,825 homes) having unpaid mortgage dues.
The CBA also explained that payment arrears in mortgages are also considered an economic indicator since they typically relate to events that have happened in the past and take time for their financial impact to be felt.
“Payment arrears are driven primarily by employment conditions and major changes in life circumstances that can cause an unexpected loss to a significant portion of household income,” the CBA noted.
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