For the first time since 2022, Canada's national mortgage delinquency rate has actually gone down. According to the latest data from Canada Mortgage and Housing Corporation, the rate dropped to 0.22% in the second quarter of 2025, down from 0.23% in Q1.

That's the first decline in three years, and honestly, it's a rare bright spot in what's been a tough stretch for Canadian homeowners.

But here's the thing. While the national numbers look better, the story gets complicated when you zoom in on specific provinces. Ontario and British Columbia are moving in the opposite direction, with delinquencies still climbing. And in Toronto specifically, the numbers are pretty stark.

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What's Actually Happening with Missed Payments

When CMHC talks about mortgage delinquencies, they're referring to homeowners who are at least 90 days behind on their mortgage payments. It's not just someone who missed one payment. It's households that have fallen seriously behind.

The national rate has been creeping up steadily since hitting a record low of 0.14% in 2022. That low point came during the pandemic when government support programs, strong income growth, and ultra-low interest rates gave homeowners unusual financial cushioning. As those supports ended and interest rates climbed sharply, more people started struggling to keep up with payments, especially at renewal time.

The recent drop suggests that some regions are stabilizing. Atlantic Canada, Quebec, and the Prairie provinces all saw improvements in payment trends. Those regional improvements were strong enough to pull the national average down, even though Ontario and BC went the other way.

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The Ontario and Toronto Situation

Ontario's delinquency rate climbed to 0.23% in Q2, which is now higher than the national average for the first time since at least 2012. That's a significant shift.

Toronto's numbers are even more concerning. The city's delinquency rate jumped from 0.15% to 0.24% year over year, a 60% surge. That's the highest level Toronto has seen since 2012.

British Columbia's rate also rose from 0.16% to 0.19% over the same period.

Why are these two provinces struggling more? A few factors seem to be at play. Both have some of the most expensive housing markets in the country, which means larger mortgages and higher monthly payments. When those mortgages renew at higher rates, the payment shock hits harder. The high cost of living in cities like Toronto and Vancouver also leaves less room in household budgets to absorb increases in mortgage payments.

It's worth noting that even with these increases, the national rate is still well below the 0.28% we saw before the pandemic in 2019. But the regional divergence is notable. Some parts of the country are managing the transition to higher rates better than others.

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The Renewal Wave That's Still Coming

Here's what makes this situation particularly tricky for many homeowners: there's still a massive wave of mortgage renewals ahead.

CMHC notes that over 750,000 mortgages are set to renew in the second half of 2025, with another 1.15 million coming up in 2026. Many of these mortgages were taken out in 2020 and 2021 when rates were at historic lows. The average rate on a five-year fixed uninsured mortgage was 2.36% in July 2020, compared to 3.95% in July 2025.

That's a significant jump, even though the Bank of Canada has been cutting rates. The central bank has reduced its benchmark rate to 2.25% as of October 2025, down from the peak of 5% in 2023. Those cuts are providing some relief, especially for variable-rate mortgage holders who benefit immediately. Fixed-rate borrowers renewing now are also getting better rates than they would have a year ago.

But even with those cuts, rates are still higher than what people locked in four or five years ago. A homeowner who had a rate around 2.3% and is renewing at 3.95% or even slightly lower is still looking at a meaningful increase in their monthly payment.

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What This Means for Homeowners

If you're facing a renewal in the next year or two, preparation matters. The good news is that rates have come down from their peak. The challenging news is that most people are still renewing at higher rates than they had before.

It's worth talking to your lender well ahead of your renewal date. You might have options you haven't considered, whether that's extending your amortization to keep payments manageable, or switching your mortgage type. Some homeowners are choosing shorter terms right now (three or four years instead of five) because they expect rates to continue dropping, though that's a bet on future rate movements.

For buyers entering the market now, the landscape is different than it was even a year ago. You're likely getting a better rate than someone who bought in early 2024, and home prices in some markets have moderated. But you're also buying at a time when economic uncertainty remains elevated, particularly around trade policy and employment.

The delinquency data also tells us something about which regions are under more pressure. If you're in Ontario or BC, it's particularly important to have a solid budget and some financial cushioning. These markets have less room for error right now.

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The Broader Economic Context

The split between improving and worsening delinquency rates across the country reflects broader economic differences. The Prairie provinces and Quebec have generally lower housing costs relative to incomes, which gives homeowners more breathing room when mortgage payments increase.

Atlantic Canada has seen some of the most improvement, which is interesting given that region historically had higher delinquency rates. It suggests the recent surge in population growth and economic activity there may be helping households manage their mortgage payments better.

CMHC also pointed out that delinquencies on other types of debt are rising. Auto loans, credit cards, and lines of credit are all seeing higher rates of missed payments. This matters because mortgage payments are typically the last thing people default on. They'll skip a car payment or miss a credit card payment before they let their mortgage slide. Rising delinquencies on those other debts can be an early warning sign that some households are under serious financial pressure.

The fact that the mortgage delinquency rate has started to decline nationally suggests that for many Canadians, the worst of the payment shock may be behind them. But it's uneven. Some regions and some households are still very much in the thick of it.

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Looking Ahead

The question now is whether this national decline continues or if it's just a temporary blip. A lot depends on the economy over the next year, particularly the job market. If unemployment rises significantly, more people will struggle with their mortgage payments regardless of what happens with interest rates.

Trade uncertainty also looms large. The ongoing disputes with the United States are creating volatility and affecting business confidence. If that translates into job losses in export-heavy industries, it could put pressure on mortgage delinquencies in affected regions.

On the positive side, continued rate cuts from the Bank of Canada should provide more relief, especially for variable-rate mortgage holders and anyone renewing in the coming months. And the housing market, while still challenging in many cities, is showing more balance than it did during the pandemic frenzy.

For now, the drop in the national delinquency rate is a welcome sign that many Canadian homeowners are managing to adapt to higher rates. But the regional differences remind us that the housing market isn't uniform. What's happening in Toronto or Vancouver can look very different from what's happening in Moncton or Saskatoon.

If you're a homeowner facing a renewal, or if you're thinking about buying, understanding these regional dynamics matters. The national headlines are one thing. Your local reality is what counts.