Mortgage Arrears Hit 14,624 in August: 0.30% at the Banks, 11.14% on GTHA Private Mortgages

Sunday, 1 November 2026 — Canadian mortgage arrears reached 14,624 in August, the highest count in twelve years, and the national mortgage arrears rate is 0.2983% of 4,902,779 bank mortgages. That number is almost useless on its own. Chartered banks sit at 0.28%. Credit unions sit at 0.14%. Mortgage investment entities — the private lenders — sit at 2.57%, and in the Greater Toronto and Hamilton Area private-lender arrears run 11.14%. One average, a forty-fold spread underneath it.

The headline this week is that mortgage arrears are at a twelve-year high. True, and the least informative way to describe what is happening. A rate of 0.2983% means roughly one mortgage in 335 is ninety days or more past due — still historically low. Canada ran above 0.40% for most of the 1990s.

What matters is where those 14,624 files sit. The national figure averages across borrowers whose default risk differs by a factor of forty. If you are renewing a prime mortgage at a bank, it overstates your risk; if you are twelve months into a private second, it understates it badly.

What the 0.30% mortgage arrears rate actually counts

The Canadian Bankers Association publishes the arrears series monthly. Its definition is narrow: payments overdue by three or more months, reported by nine participating banks. Three things follow from that.

It excludes everyone not at one of those banks — credit unions, monoline lenders, mortgage finance companies, B lenders and every private lender in the country. It excludes anyone one or two payments behind, which is where most trouble starts and ends. And it lags: the August figure was published on 30 October.

So the series is a clean read on prime bank credit and a blank space everywhere else — the wrong half of the market to be measuring.

Mortgage arrears by province: Saskatchewan 0.45%, Quebec 0.19%

The provincial spread in the August data is wider than the national move, and your province matters:

Province or region	Mortgages	In arrears	Arrears rate	Share of all arrears
Saskatchewan	118,863	529	0.4451%	3.62%
Manitoba	114,005	395	0.3465%	2.70%
Ontario	2,142,755	7,512	0.3506%	51.37%
Atlantic	334,109	1,036	0.3101%	7.08%
Alberta	565,929	1,591	0.2811%	10.88%
British Columbia	684,703	1,817	0.2654%	12.42%
Quebec	931,874	1,744	0.1871%	11.93%
Canada	4,902,779	14,624	0.2983%	100%

Ontario holds 43.70% of the country's mortgages and 51.37% of its mortgage arrears. Quebec holds 19.01% of the mortgages and 11.93% of the arrears. If Ontario ran at Quebec's rate, there would be 4,010 Ontario files in arrears instead of 7,512 — 3,502 fewer, and the national count would fall below 11,200.

Saskatchewan has the highest provincial rate at 0.4451% but only 529 files, so it barely moves the national number. Ontario is the national number.

The forty-fold spread: mortgage arrears by lender type

This is the part the headline leaves out. CMHC's Residential Mortgage Industry Report, Fall 2026 edition, breaks ninety-day arrears down by who holds the mortgage, for the second quarter of 2026:

Lender type	Arrears rate, 90+ days	Roughly one in	Versus chartered banks
Credit unions	0.14%	714	0.5x
Chartered banks	0.28%	357	1.0x
Other non-bank lenders	0.27%	370	1.0x
Mortgage investment entities	2.57%	39	9.2x
Mortgage investment entities, GTHA	11.14%	9	39.8x

Mortgage investment entities — the MICs and pooled private funds behind much of private mortgage lending — are running mortgage arrears at 2.57%, nine times the bank rate. In the GTHA it is 11.14%, one mortgage in nine, against 3.82% for the rest of Canada. Those entities held 1.8% of outstanding balances in 2026 Q1 — very little of the national average, almost all of the distress.

Read the two together and your exposure depends almost entirely on who holds your mortgage. Mortgage arrears at the banks are rising slowly from a very low base. Mortgage arrears in private lending sit at a level that, in any other credit market, would be called a problem.

Why the GTHA private number is 11.14%

Private mortgages are short. A one-year interest-only term written at the top of the market is not a loan you pay down; it is a bridge to an exit, and the exit is a refinance, a sale or a move back to a B lender. Three things have made that exit harder.

The exit rate moved against the borrower

Anyone who took a private second in 2024 or 2025 priced their exit against a falling policy rate. The Bank of Canada raised the policy rate by 25 basis points to 2.50% on 28 October, the first increase since 2023, and prime moved to 4.70%. Best five-year fixed rates sit near 4.39% to 4.44% and the lowest five-year variable rates have moved up toward 3.70%. That is far cheaper than any private mortgage, but higher than the exit the borrower underwrote.

Qualifying got no easier

A borrower refinancing out of a private mortgage still has to clear the stress test at the contract rate plus two percentage points, or 5.25%, whichever is higher. At 4.44% that is 6.44%, and with unemployment near 6.5% for several months, the income side has not improved.

Renewal into the same product compounds

When the exit does not appear, the private mortgage renews — with a new lender fee, a new broker fee and often a higher rate. Each renewal adds cost to the balance the borrower is trying to escape. We have written separately on what a private mortgage actually costs in Canada, and the compounding effect of a second and third term is the single biggest reason a file slides into mortgage arrears rather than out of it.

The renewal arithmetic that produces mortgage arrears

The bank-side story is simpler and it is still working through. Take a $500,000 mortgage written in 2021 at 1.99% on a 25-year amortization, which was ordinary pricing when you signed it.

Stage	Rate	Amortization left	Monthly payment	Change
2021 original	1.99%	25 years	$2,114.84	—
Renew today, fixed	4.44%	20 years	$2,626.63	+$511.79
Renew today, variable	3.70%	20 years	$2,465.79	+$350.94
Renew today, stretched	4.44%	30 years	$2,096.87	−$17.97

Your balance at renewal is $418,762.92, and the fixed renewal costs $511.79 more each month — a 24.2% increase, $6,141.46 a year. That is the payment shock that has been driving bank mortgage arrears up 32.2% since May 2025.

The fourth row is why mortgage arrears have risen slowly rather than sharply. Stretching the amortization back to 30 years holds the payment essentially flat — $17.97 below the 2021 payment — and CMHC has observed that most renewing borrowers did lengthen their amortization. It works, and it costs you $124,482.10 in extra interest over the life of the loan. Our piece on mortgage renewal shock in 2026 works through that trade in full.

What three missed payments actually costs

Ninety days is the reporting threshold, not the point of no return. On that renewed $418,762.92 balance at 4.44%:

Months missed	Payments not made	Balance	Interest added
0	$0.00	$418,762.92	$0.00
1	$2,626.63	$420,298.20	$1,535.28
2	$5,253.26	$421,839.11	$3,076.19
3	$7,879.90	$423,385.67	$4,622.75

Three missed payments leave you $7,879.90 behind and the balance $4,622.75 higher. Curing it costs roughly $12,502.65 all in, before any lender administration charge. Borrowing that money privately is expensive: on a $25,000 private second at an illustrative 10.99% with 2% lender and 2% broker fees — an assumption for the arithmetic, not a market quote, because private pricing is set file by file — one year costs about $3,747.50, or 14.99% of the principal advanced.

That is the trap. The cheapest moment to deal with mortgage arrears is before the first payment is missed, and the cost of waiting is not linear.

What to do if you are heading toward mortgage arrears

• Call the lender before you miss, not after. A payment deferral, a skip-a-payment or an amortization extension requested in advance is an administrative change. The same request after ninety days is a collections conversation.
• Price the amortization extension first. On the example above it saves $529.76 a month against a 20-year renewal and costs $124,482.10 in interest. That is a bad trade you can reverse later with prepayments, and it is better than arrears.
• Shop the renewal rather than signing it. A posted renewal offer and a shopped one are routinely 20 to 50 basis points apart, which on $418,762.92 is $40 to $100 a month.
• Check your trigger rate if you hold a fixed-payment variable. Prime at 4.70% moved a lot of those files closer to the point where the payment no longer covers interest. See how a rate hike works on a fixed-payment variable mortgage.
• If you are in a private mortgage, start the exit at month three, not month ten. A B-lender application needs clean recent payment history, and twelve months of it is worth more than any rate you negotiate.
• Do not add unsecured debt to carry a mortgage payment. Credit card arrears at ninety days ran 4.19% nationally in the second quarter, and card debt is the hardest thing to refinance out of.
• Get the arrears figure in writing. Payments outstanding, accrued interest and administration charges are three separate numbers, and lenders do not always volunteer the third.

What to watch next

The October Labour Force Survey lands on 6 November and October CPI on 16 November, both at 08:30 ET. The next Bank of Canada decision is 9 December. Headline inflation has run near 3% since April and the Bank expects about 3.5% by year-end, with core measures close to 2%. Markets currently expect a hold in December, but that is a market expectation and either November release can change it.

For mortgage arrears specifically, the series to watch is CMHC's CMA-level forecast. It has Toronto's delinquency rate rising from 0.2608% in September 2025 to 0.3404% by December 2026, a 30.5% increase, while Montreal and Ottawa are forecast to fall. Those are projections built on an assumed rate path, and the 28 October increase was not in that path.

Common questions

Does being in mortgage arrears mean I will lose the house?

No. Ninety days past due is a reporting threshold, not a foreclosure. Lenders generally prefer a workout to a power of sale because enforcement is slow and expensive for them too. The 14,624 files in the August data are overwhelmingly not in enforcement. What arrears do reliably cost you is access to prime credit for the next two to three years.

Why are private-lender mortgage arrears so much higher than bank arrears?

Partly because the borrowers were already impaired when they took the loan, and partly structural. Private mortgages are short, interest-only and priced to be exited within a year or two, so a borrower whose exit does not materialise is in default on a schedule a 25-year amortization would never produce. The 11.14% GTHA figure reflects both effects at once.

Will mortgage arrears keep rising from here?

The direction has been consistent for four years — the count is up 101.0% from its record low of 7,274 in August 2022 — and the cohort still working through is the 2021 and 2022 vintage, which faces the largest rate gap. No one can tell you where arrears go next; it depends on employment and rates. The 28 October increase pushes one way, and the amortization extensions most borrowers took at renewal push the other.

Figures as dated: Canadian Bankers Association arrears for August 2026, published 30 October 2026; CMHC Residential Mortgage Industry Report, Fall 2026, lender-type arrears for 2026 Q2 and MIE regional arrears for 2026 Q1; Bank of Canada policy rate and readings from the 28 October 2026 announcement; five-year Government of Canada benchmark yield 3.58% at 29 October 2026; retail rates as published 30 October to 1 November 2026. The $500,000 mortgage, the 1.99% 2021 rate and the private second pricing are illustrative parameters, not quotes. No guarantee or approval is implied.