Toronto real estate just got another sign that it entered one of its roughest markets ever. Equifax data shows the Greater Toronto mortgage delinquency rate climbed again in Q2 2024. Just two years after hitting a record low, the rate is now climbing at one of the most aggressive paces in history, hitting a 9 year high in the latest data.
Mortgage Delinquency Rates
The mortgage delinquency rate is the share of total mortgages at least 90 days past due (DPD). It’s one of the most discussed and important economic indicators but also one of the most misunderstood.
Most people think a rising delinquency rate means households are struggling. Not necessarily the case since most people will try to sell their property before the mortgage becomes delinquent. In a hot market, a distressed seller can sell the property and often make money before the mortgage turns delinquent.
Mortgage borrowers only tend to default when they can’t dispose of the property in a timely fashion. In short, it’s less of a sign of consumer health and more a sign of market liquidity.
Toronto Mortgage Delinquency Rate Hit The Highest Level Since 2015
The share of Greater Toronto mortgages considered delinquent (90 days past due), as reported to Equifax.
| Quarter | Toronto |
|---|---|
| 2014 Q1 | 0.21 |
| 2014 Q2 | 0.2 |
| 2014 Q3 | 0.19 |
| 2014 Q4 | 0.18 |
| 2015 Q1 | 0.18 |
| 2015 Q2 | 0.17 |
| 2015 Q3 | 0.16 |
| 2015 Q4 | 0.15 |
| 2016 Q1 | 0.14 |
| 2016 Q2 | 0.14 |
| 2016 Q3 | 0.13 |
| 2016 Q4 | 0.12 |
| 2017 Q1 | 0.11 |
| 2017 Q2 | 0.1 |
| 2017 Q3 | 0.09 |
| 2017 Q4 | 0.09 |
| 2018 Q1 | 0.09 |
| 2018 Q2 | 0.1 |
| 2018 Q3 | 0.1 |
| 2018 Q4 | 0.1 |
| 2019 Q1 | 0.1 |
| 2019 Q2 | 0.11 |
| 2019 Q3 | 0.11 |
| 2019 Q4 | 0.11 |
| 2020 Q1 | 0.1 |
| 2020 Q2 | 0.1 |
| 2020 Q3 | 0.11 |
| 2020 Q4 | 0.09 |
| 2021 Q1 | 0.1 |
| 2021 Q2 | 0.09 |
| 2021 Q3 | 0.08 |
| 2021 Q4 | 0.07 |
| 2022 Q1 | 0.06 |
| 2022 Q2 | 0.06 |
| 2022 Q3 | 0.06 |
| 2022 Q4 | 0.07 |
| 2023 Q1 | 0.07 |
| 2023 Q2 | 0.08 |
| 2023 Q3 | 0.1 |
| 2023 Q4 | 0.12 |
| 2024 Q1 | 0.14 |
| 2024 Q2 | 0.16 |
Source: Equifax; CMHC; Better Dwelling.
Greater Toronto mortgage delinquencies have been increasing steadily over the past few years. The rate climbed 14.3% (+0.02 points) to 0.16% of mortgages in Q2 2024, doubling (+0.08 points) the same quarter a year before. The rise has been fairly steady over the past few months, and making up for lost time.
The rise is one of the sharpest in history, and shows the sudden change. Since hitting a record low in 2022, its climbed 166% to the highest rate since 2015. It pales compared to the previous months, and that’s not exactly when dinosaurs roamed the earth. However, it predates Toronto’s recent real estate boom and the rate is climbing, not falling as it was back then.
Most surprising is the fact this increase is occurring in the current environment. Policymakers have gone to unusually extreme lengths to mitigate rising delinquencies. They’ve asked lenders to do virtually anything to prevent mortgages from falling into arrears, such as extending the mortgage to create multi-generational amortizations. Even with these measures, the rate is rising sharply across Greater Toronto—much more sharply than the national average.
