National housing agency data shows renewals dominated 2025, but rising arrears and financial strain signal deeper pressures ahead
Canada's residential mortgage market reached a turning point in 2025, with renewal activity cresting what has become a defining wave for the country's housing finance system.
That is the picture painted in the Canada Mortgage and Housing Corporation's (CMHC) Spring 2026 Residential Mortgage Industry Report (RMIR), which confirms that renewal volumes dominated industry activity last year before expected easing through 2026.
The report arrives as brokers across the country navigate a rate environment that has left many borrowers significantly worse off than when they first signed their mortgage.
"At the national level, mortgage arrears remain low by historical standards and the mortgage system overall is stable, but pockets of significant stress still exist beneath the surface, particularly in areas like Toronto and Vancouver where arrears have grown the most," said Aled ab Iorwerth, deputy chief economist at CMHC.
"While the renewal wave is dissipating, many borrowers face increased financial stress. CMHC will continue to closely monitor how risk factors develop across the industry."
Read more: Canadians split on housing outlook amid renewal wave
Renewal wave dissipates but payment shock persists
The surge in renewal activity reflects the unusually large cohort of three- to five-year mortgages originated at historically low rates in the early 2020s, which are now rolling off their terms in significant numbers.
While CMHC expects that volume to ease through 2026, the financial consequences for borrowers confronting today's rate environment have not eased at all.
Most Canadians renewing their mortgages in the current cycle face materially higher interest costs than when they first entered the market, a dynamic that has placed mortgage professionals on the front lines of some of the most financially consequential conversations their clients have had in a generation.
For brokers, the renewal wave has represented both a surge in business activity and a complex advisory challenge, as clients weigh rate terms, lender options, and payment structures against an uncertain economic backdrop.
Residential mortgage debt crossed the $2.4 trillion mark in December 2025, rising 4.8% year-over-year, according to the report.
CMHC delivered a record-setting performance in 2025, expanding its reach across rental construction, homebuyer insurance and affordable housing programs even as trade tensions and macroeconomic volatility tested the country's financial foundations.https://t.co/rvdooyd9yn
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 7, 2026
Stress fractures emerge in Toronto and beyond
The national 90-plus-day delinquency rate edged up to 0.24% in the fourth quarter of 2025, from 0.21% a year earlier, still below pre-pandemic levels, but the direction of travel is drawing attention.
The rise was concentrated in Ontario and, most acutely, in the Toronto Census Metropolitan Area, where delinquencies climbed 35% and 45% year-over-year, respectively.
Non-mortgage arrears also rose over the period, though the rate of increase slowed — a signal that, while consumers are managing their overall debt loads with somewhat greater stability, housing-related financial stress in key markets continues to build.
“I think [delinquencies] will continue to increase as more homeowners renew their mortgages in the next 12 months, 24 months even. But I think it’s going to be a slow grind,” Rates.ca mortgage and real estate expert Victor Tran previously told Canadian Mortgage Professional.
“It’s not going to be a significant, drastic increase suddenly and I don’t think we’re going to see sudden mass foreclosures or power of sales.
“At the end of the day, the banks and lenders out there are in business to help homeowners out and lend them money, not to foreclose on homes.”
Borrowers pivot to shorter terms and variable rates
Beyond arrears, the RMIR highlights a notable shift in borrower behaviour.
Faced with ongoing interest rate uncertainty, Canadians increasingly gravitated toward shorter mortgage terms and variable-rate products in 2025. That's a clear sign that many borrowers are hedging their bets rather than locking in for the long term at rates they believe may decline.
The report also points to a marked increase in insured lending, following regulatory changes that broadened access to mortgage insurance. That shift has expanded the pool of borrowers eligible for insured products and, by extension, altered the risk composition of new originations flowing through the system.
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