Understanding the Rising Financial Pressure
Introduction
Canadian households continue to face significant financial pressure. While mortgage payments often dominate the national conversation, missed payments on credit cards, auto loans, personal loans, and lines of credit have also become a serious concern.
Equifax reported that Canada’s non-mortgage delinquency rate reached levels not seen since 2009 during the first quarter of 2025. By the end of 2025, the national rate remained elevated, although the pace of the annual increase had slowed. These figures show that many households are still struggling to balance debt payments with housing, food, insurance, transportation, utilities, and other regular expenses.
The pressure is not affecting every household equally. Younger consumers, households without mortgages, and borrowers in Ontario and parts of Western Canada have shown greater signs of consumer-credit stress.
This article explains what non-mortgage delinquency means, what the latest available data shows, which regions are experiencing the greatest pressure, and which options borrowers may review before the situation becomes more serious.
Quick Answer: Why Are Non-Mortgage Delinquencies Rising in Canada?
Non-mortgage delinquencies rise when more borrowers fall significantly behind on products such as credit cards, auto loans, personal loans, and lines of credit.
In the first quarter of 2025, Equifax reported that Canada’s 90-plus-day non-mortgage delinquency rate reached 1.60%, an increase of 17.06% from the previous year. Average non-mortgage debt also reached $21,859 per consumer. By the fourth quarter, the national delinquency rate had increased to 1.73%, while average non-mortgage debt reached $22,377.
Several pressures may be contributing, including:
- High living expenses
- Income uncertainty
- Reduced household savings
- Greater reliance on revolving credit
- Mortgage renewal payment increases
- Auto-loan and credit-card balances
- Unexpected household expenses
- Limited room in monthly budgets
A rise of 17.06% does not mean that 17.06% of Canadians were delinquent. It means the measured delinquency rate was 17.06% higher than it had been one year earlier.
What Counts as Non-Mortgage Debt?
Non-mortgage debt includes borrowing that is not part of a residential mortgage.
Common examples include:
- Credit cards
- Personal loans
- Auto loans
- Personal lines of credit
- Retail financing
- Installment loans
- Certain secured lines of credit
The Equifax figures discussed in this article measure balances that are at least 90 days delinquent.
A delinquent payment is not always the same as a legal or contractual default. The exact meaning of default can depend on the lender and credit agreement. When discussing the Equifax data, delinquency or missed payments is the more precise wording.
What the Q1 2025 Data Showed
Equifax reported that total Canadian consumer debt reached $2.55 trillion at the end of the first quarter of 2025.
Average non-mortgage debt reached $21,859 per consumer. The national 90-plus-day non-mortgage delinquency rate stood at 1.60%, which was 17.06% higher than in the first quarter of 2024.
The report also found that:
- More than 1.4 million Canadian consumers missed at least one credit payment during the quarter
- Credit-card balances continued to rise even as card spending slowed
- Auto lending contributed to higher average consumer debt
- Younger consumers showed greater financial stress
- Ontario recorded the fastest provincial increase in serious non-mortgage delinquency
These figures should be treated as a Q1 2025 snapshot rather than the latest available national data.
What Changed by the End of 2025?
Equifax’s fourth-quarter report showed that consumer-credit stress remained elevated but had become more uneven across regions and age groups.
By Q4 2025:
- Total consumer debt reached $2.65 trillion
- Non-mortgage debt was 4.50% higher than one year earlier
- Average non-mortgage debt reached $22,377 per consumer
- The national 90-plus-day delinquency rate reached 1.73%
- The delinquency rate was 5.43% higher than one year earlier
- Credit-card balances reached a record $131 billion
- Consumers aged 26 to 35 had the highest delinquency rate at 2.55%
This means the national delinquency rate was higher at the end of 2025 than it had been in Q1, even though its year-over-year growth rate had slowed.
The data also showed a widening difference between consumers. Older borrowers with stronger credit generally remained more resilient, while younger consumers and borrowers in Ontario and parts of Western Canada showed greater financial weakening.
Which Provinces Saw the Greatest Pressure?
Ontario
Ontario recorded the fastest increase in non-mortgage delinquency during both the first and fourth quarters of 2025.
In Q1 2025, Ontario’s non-mortgage delinquency rate was 1.73%, which was 24.00% higher than one year earlier.
This does not mean 24% of Ontario borrowers were delinquent. It means the 1.73% delinquency rate had increased by 24% compared with Q1 2024.
By Q4 2025, Ontario still had the fastest provincial acceleration in non-mortgage delinquency, with an annual increase of 10.31%.
Alberta
Alberta experienced a large increase during Q1 2025. By the fourth quarter, it had the highest overall provincial non-mortgage missed-payment rate at 2.45%.
Quebec and Atlantic Canada
Some provinces with comparatively better housing affordability showed improving or declining delinquency rates by the end of 2025. Equifax reported decreases in Prince Edward Island, Nova Scotia, New Brunswick, and Quebec during Q4.
This regional difference shows why national averages do not tell the complete story.
At Mortgage Brain, we often see that consumer-credit stress affects households differently based on housing costs, income stability, home ownership, available equity, and the type of debt being carried.
Which Canadian Cities Had High Delinquency Rates?
Equifax’s Q1 2025 data showed that Toronto experienced one of the largest annual increases in serious non-mortgage delinquency.
The Q1 figures included:
- Fort McMurray: 2.56% delinquency rate
- Edmonton: 2.26% delinquency rate
- Toronto: 2.17% delinquency rate
Toronto’s delinquency rate was 24.28% higher than one year earlier.
Average non-mortgage debt included:
- Fort McMurray: $37,269
- Ontario: $22,543
- Toronto: $21,048
A city can have the fastest annual increase without having the highest overall delinquency rate. Toronto had a particularly large annual increase, while Fort McMurray had the highest rate and average non-mortgage debt among the cities highlighted in the report.
By Q4 2025, Equifax reported a 2.70% delinquency rate in Edmonton and 2.20% in Calgary, showing that consumer-credit pressure remained significant in Alberta’s major cities.
What May Be Contributing to Rising Delinquencies?
There is no single cause. Several household and economic pressures may contribute to missed payments.
Cost of Living Pressure
Food, housing, transportation, insurance, utilities, and other essential expenses can leave households with less money for debt repayment.
When regular spending rises faster than income, borrowers may rely on credit cards or lines of credit to cover normal expenses.
Greater Reliance on Revolving Credit
The Bank of Canada found that households often begin relying more heavily on credit cards and lines of credit about two years before missing a mortgage payment.
Between one and two years before mortgage delinquency, some households also begin missing consumer-credit payments, especially credit-card payments. This makes consumer-credit behaviour an important early warning sign of broader financial pressure.
Limited Savings and Financial Flexibility
Households with little emergency savings may have fewer options when facing:
- Income loss
- Reduced working hours
- Home or vehicle repairs
- Medical or family expenses
- Higher insurance costs
- Unexpected tax obligations
Statistics Canada reported that the household saving rate declined to 4.4% in Q4 2025 because household spending grew faster than disposable income.
Mortgage Renewal Payments
Many borrowers who obtained low mortgage rates during the pandemic renewed at higher rates during 2025 and the first half of 2026.
The Bank of Canada reported that most borrowers continued to manage the increase, but households with large mortgage balances relative to income experienced greater pressure. Stress was particularly concentrated among some Toronto-area borrowers who purchased in 2022 and 2023.
A higher housing payment can leave less money available for credit cards, auto loans, and other obligations.
Employment and Income Changes
A job loss, temporary reduction in working hours, or unstable income can make fixed debt payments harder to maintain.
The pressure may be greater for households that were already relying on credit for essential expenses.
Rising Auto and Credit-Card Balances
Auto financing and credit-card balances represented important parts of non-mortgage debt growth during 2025.
Credit-card balances reached $131 billion by Q4 2025, despite consumers reducing some holiday spending.
What Does the Broader Household Debt Picture Show?
Non-mortgage debt is only one part of Canadian household indebtedness.
Statistics Canada reported that total household credit-market debt exceeded $3.2 trillion in Q4 2025. Household credit-market debt equalled $1.77 for every dollar of household disposable income.
However, the picture was mixed:
- Household debt grew faster than income
- Demand for new non-mortgage borrowing slowed during 2025
- Consumer-credit demand fell 23.7% compared with 2024
- The effective interest cost of non-mortgage loans eased to 8.44% in Q4
- The household debt-service ratio declined slightly
This shows that Canadians were not simply borrowing more in every category. Some consumers reduced new borrowing, while existing balances and missed payments remained a concern.
The Bank of Canada’s 2026 Financial Stability Report also found that overall household stress had stabilized after rising for several years. However, financial stress remained higher among people without mortgages. Approximately 2.5% of borrowers without a mortgage were more than 60 days late on at least one account, compared with about 1.3% of mortgage holders.
How Can Rising Delinquencies Affect Households?
Reduced Access to Credit
Missed payments may make future borrowing more difficult or expensive.
The effect depends on the complete credit file, including:
- Payment history
- Total debt
- Credit utilization
- Account age
- Recent applications
- Future repayment behaviour
Higher Borrowing Costs
Borrowers with missed payments may have fewer lender options and may be offered higher rates or additional conditions.
No specific credit outcome applies to every person.
Collection and Legal Activity
Accounts that remain unpaid may be sent to collection agencies. Depending on the debt and circumstances, a creditor may also take legal action.
Less Money for Household Spending
Higher debt payments may reduce the money available for:
- Food
- Housing
- Transportation
- Savings
- Insurance
- Education
- Emergency expenses
Greater Risk of Mortgage Stress
Consumer-credit stress can appear before mortgage problems. The Bank of Canada found that increasing credit use and missed consumer payments may emerge months or years before some households miss a mortgage payment.
At Mortgage Brain, we often see homeowners seek help after credit-card or line-of-credit payments become difficult but before the mortgage itself falls behind. Reviewing the situation at that stage may help clarify which options remain available.
What Should You Do Before Missing More Payments?
List Every Debt
Write down:
- Creditor
- Balance
- Interest rate
- Minimum payment
- Due date
- Whether the account is current
- Whether it is secured or unsecured
- Whether it is already in collection
Review Reliable Monthly Income
Compare total debt payments and essential household expenses with dependable after-tax income.
This helps identify whether the pressure is temporary or whether the household has an ongoing monthly shortfall.
Contact Creditors Early
A creditor may have payment arrangements, hardship programs, or temporary options available.
No particular result is guaranteed, but it is usually better to communicate before an account becomes seriously delinquent.
Review Credit Reports
Check the information reported by Canada’s national credit bureaus and dispute any information believed to be inaccurate.
Avoid Using New Debt to Cover an Ongoing Deficit
Borrowing may provide temporary relief, but it may create greater risk when monthly expenses consistently exceed income.
Speak With the Appropriate Professional
Different professionals explain different options:
- A mortgage professional can explain refinancing, HELOCs, and second mortgages
- A credit counsellor can explain budgeting and debt-management plans
- A Licensed Insolvency Trustee can explain consumer proposals and bankruptcy
- A lawyer can provide legal advice
- A qualified tax professional can explain tax matters
What Options Can Borrowers Review?
The appropriate option depends on whether full repayment remains realistic, whether the borrower owns a home, and whether the financial pressure is temporary or ongoing.
Possible options may include:
- A personal consolidation loan
- Direct repayment arrangements
- A debt-management plan
- Mortgage refinancing
- A home equity line of credit
- A second mortgage
- A consumer proposal
- Bankruptcy
- Selling an asset or property, where appropriate
These options do not work in the same way.
A consolidation loan or mortgage involves new borrowing. A debt-management plan is generally an informal repayment arrangement. A consumer proposal and bankruptcy are formal insolvency processes administered by a Licensed Insolvency Trustee.
Can Home Equity Be Used to Pay Non-Mortgage Debt?
Possibly.
An Ontario homeowner with enough equity may be able to review:
- Mortgage refinancing
- A home equity line of credit
- A second mortgage
These options may be used to repay selected credit cards, personal loans, lines of credit, or other eligible obligations.
However, using home equity does not eliminate the debt. It moves selected balances into borrowing secured against the property.
This may:
- Reduce the interest rate on selected balances
- Simplify the number of payments
- Change the monthly payment
- Extend repayment over more years
- Increase total mortgage debt
- Reduce available home equity
- Create legal, appraisal, lender, or brokerage costs
- Increase the consequences of missed payments
A lower monthly payment is not the same as lower total cost.
At Mortgage Brain, we often see homeowners focus on their available equity before subtracting mortgage penalties, legal costs, appraisal fees, lender fees, brokerage fees, arrears, and creditor payouts. The net funds after these deductions are often more important than the approved mortgage amount.
What Ontario Mortgage Rules Apply?
Ontario mortgage brokerages must take reasonable steps to ensure that a mortgage presented to a client is suitable for that client’s unique needs and circumstances.
FSRA’s guidance expects a brokerage to:
- Understand the client
- Understand the mortgage product
- Assess available mortgage options
- Explain material features and risks
- Document why a presented product appears suitable
- Maintain appropriate oversight and records
A mortgage should not be presented as the automatic solution to consumer debt.
The review should consider:
- Income and payment ability
- Current mortgage terms
- Property and available equity
- Credit history
- Existing debts
- Mortgage penalties
- Fees
- Total borrowing cost
- Risk to the home
- The repayment or exit plan
Mortgage Brain’s role is to explain mortgage-based options. A Licensed Insolvency Trustee or credit counsellor must explain options within their respective areas.
Frequently Asked Questions
What Does Non-Mortgage Delinquency Mean?
It generally means a borrower has fallen behind on credit products other than a mortgage.
The Equifax reports discussed here measure serious delinquency using balances that are at least 90 days past due.
Does a 24% Increase Mean 24% of Ontario Borrowers Were Delinquent?
No.
Ontario’s non-mortgage delinquency rate was 1.73% in Q1 2025. That rate was 24% higher than it had been one year earlier.
Which Age Group Is Under the Most Pressure?
In Q4 2025, consumers aged 26 to 35 had the highest 90-plus-day non-mortgage delinquency rate at 2.55%.
Are Homeowners or Non-Homeowners Facing More Stress?
The Bank of Canada reported that borrowers without mortgages had higher overall financial stress. About 2.5% were more than 60 days late on at least one account, compared with approximately 1.3% of mortgage holders.
Can I Use Home Equity to Pay Credit-Card Debt?
Possibly.
Refinancing, a HELOC, or a second mortgage may provide funds to repay selected debts. Qualification depends on equity, income, credit, property details, lender requirements, costs, and payment ability.
The debt also becomes secured against the home.
Will Debt Consolidation Improve My Credit?
Not necessarily.
The outcome depends on payment history, balances, credit utilization, account closures, credit inquiries, new borrowing, and whether future payments remain current.
No improvement can be guaranteed.
Can Debt Consolidation Stop Collection Calls?
A mortgage or loan application does not create legal protection from creditors.
Paying an account may stop collection activity relating to that account. A filed consumer proposal or bankruptcy may stop certain collection actions involving included debts, subject to federal insolvency law.
When Should I Speak With a Licensed Insolvency Trustee?
An LIT may be worth consulting when:
- Full repayment no longer appears realistic
- Collection or garnishment activity is occurring
- Payments are repeatedly being missed
- The borrower needs information about a consumer proposal or bankruptcy
Speaking with an LIT does not automatically mean a person must file.
How Mortgage Brain Can Help
Mortgage Brain helps Ontario homeowners review mortgage-based debt-consolidation options where appropriate.
Our review may include:
- Current mortgage terms
- Available home equity
- Estimated mortgage penalties
- Income and payment ability
- Credit history
- Existing debts
- Mortgage refinancing
- HELOCs
- Second mortgages
- Lender and brokerage fees
- Legal and appraisal costs
- Net funds after deductions
- Risk to the property
- The repayment or exit plan
A mortgage application should not be treated as the automatic solution to consumer debt. We review the payment, total cost, equity, property risk, lender requirements, and repayment plan before presenting a mortgage product.
Approval, rates, fees, terms, funding timelines, and available products depend on the homeowner, property, lender, and market conditions. No outcome can be guaranteed.
Use the Mortgage Brain mortgage calculator to estimate possible mortgage payments and better understand how additional mortgage borrowing may affect your monthly budget.
Calculator results are estimates only. They are not an approval, rate quote, qualification decision, lending commitment, or personal mortgage recommendation.
After reviewing your numbers, Contact Us to request an initial mortgage consultation with a licensed Mortgage Brain professional.
We can explain possible mortgage structures, estimated costs, lender requirements, property risks, and repayment considerations based on the information you provide.
Mortgage Brain does not administer debt-management plans, consumer proposals, or bankruptcies and does not provide legal, tax, credit-counselling, or insolvency advice.
Final Thoughts
Rising non-mortgage delinquencies show that many Canadians are having difficulty managing credit cards, auto loans, lines of credit, and other financial obligations.
However, the data does not mean every household is facing the same level of stress. Home ownership, income, age, region, credit history, savings, housing payments, and the type of debt all influence the available options.
Before choosing a debt solution, compare:
- Monthly payment
- Total repayment cost
- Interest and fees
- Repayment period
- Credit impact
- Risk to assets
- Legal protection
- Whether full repayment is realistic
- What happens if the plan cannot be completed
Homeowners may have mortgage-based options, but accessing equity does not remove debt. It places selected balances against the property.
The most appropriate next step is to obtain information from the professional qualified to explain the option being considered.
Disclaimer
This article is for general educational purposes only. It does not provide mortgage, financial, legal, tax, credit-counselling, debt-settlement, or insolvency advice.
Mortgage Brain is a licensed Ontario mortgage brokerage. Mortgage products are subject to lender approval, property requirements, income review, credit review, appraisal, legal review, applicable laws, and individual lender policies.
Rates, fees, terms, qualification requirements, lender conditions, funding timelines, and product availability may change.
Mortgage Brain does not guarantee mortgage approval, lower payments, interest savings, debt reduction, refinancing, renewal, credit improvement, creditor acceptance, funding, or any particular financial result.
Data Sources
- Equifax Canada, Q1 2025 Market Pulse Quarterly Consumer Credit Trends.
- Equifax Canada, Q4 2025 Market Pulse Quarterly Consumer Credit Trends.
- Statistics Canada, National Balance Sheet and Financial Flow Accounts, Fourth Quarter 2025.
- Bank of Canada, What Typically Happens Before Households Fall Behind on Mortgage Payments.
- Bank of Canada, Financial Stability Report 2026: Households.
- Financial Services Regulatory Authority of Ontario, Mortgage Product Suitability Assessment.
