Equifax Canada delves into the main risks – and opportunities – facing the market this year and heading into 2027
Canadian mortgage brokers and borrowers are navigating a credit landscape that looks more challenging by the day, with mortgage debt swelling and arrears continuing to climb.
Equifax Canada says consumer debt in Canada has now reached $2.68 trillion, with outstanding mortgage balances sitting at $1.97 trillion – an increase of about 4% from the previous year, mainly due to higher renewal activity.
Insolvency filings, meanwhile, have hit their highest level since 2009, with fraud losses in Ontario along reaching troubling new thresholds.
Speaking at last week’s MortgageFest Canada in Toronto, Equifax Canada’s director, solutions – mortgage and housing Lindsay Zwart (pictured top) highlighted the changing outlook facing brokers and their clients.
“Risking a borrower in 2026 does not look the same as risking a borrower in 2016, in 2019, and in 2020,” she said. “As a broker, your two most valuable currencies are your time and your reputation in the industry with your lenders.”
Home prices have fallen across many major Canadian markets in recent years, modestly helping the affordability picture. But interest rates are on the rise again and there’s been no game-changing shift where affordability is concerned – meaning seven out of 10 borrowers are now purchasing in a co-borrowing arrangement, according to Zwart and Equifax.
Within that group, the age gap between co-borrowers has also changed materially. Since 2016, with proportion of co-borrowers with an age difference of 20 years or more has doubled, seemingly showing that an ever-growing cohort of buyers are continuing to turn to parental and familial support, or the so-called Bank of Mom and Dad.
Seventy-three percent (73%) of new mortgages are now in variable-rate or short-term products, with only 27% on a five-year fixed product. Zwart suggested brokers should be alert to a change in preferences toward shorter mortgage terms.
“Instead of the great renewal, I think forward-looking, we need to be looking at the constant renewal,” she said. “With those two years, those three years, those four years, those ARMs [adjustable-rate mortgages] that are coming up for renewal… as brokers, you’re going to be renewing on a very regular basis now.”
What’s more, property value contraction may be welcomed by buyers – but it’s also added another layer of complexity. Equifax has recorded a 3% decrease in property values nationally, meaning more existing homeowners are facing negative equity, higher loan-to-value ratios, and refinancing constraints at renewal time.
Delinquencies, fraud trends remain on the radar
Mortgage delinquency among outstanding balances, meanwhile, is running at 0.3%. That’s about 30% higher than the same period last year, mainly concentrated in Ontario. Non-mortgage delinquencies among homeowners are 12.5% above the same time in 2025, and insolvency rates – i.e., bankruptcy and consumer proposals – are now at their highest level since 2009.
On fraud, Zwart said the picture is equally stark. An Equifax analysis said at least $216 million in Ontario mortgage balances are currently sitting in severe delinquency and flagging on fraud tools, exposure that wasn’t identified at origination.
Mortgage fraud is most commonly perpetrated by those in the 26-to-45 age bracket, according to Zwart, and is concentrated in British Columbia and – more recently – Quebec. Falsified financials and documents are the key driver in the mortgage space.
Opportunities and challenges abound for 2027
Looking to the year ahead, Zwart flagged a number of additional headwinds looming for brokers and borrowers: the Bank of Canada is projected to increase its benchmark rate to counter inflation, while housing starts are declining thanks to elevated labour and financing costs, potentially complicating the supply and affordability outlook even further.
A return-to-office trend, meanwhile, could push buyers back toward urban centres. Add those trends to the continuing storm clouds around mortgage renewals, and Zwart suggested the value of brokers is only likely to grow in 2027.
“Whether it’s rising rates, housing starts, returning to office – mine your book,” she said. “Your opportunity exists within your book.”
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