Key Takeaways:
- Why Toronto leads Canada in mortgage delinquencies
- How rate hikes are squeezing homeowners
- What RBC’s latest numbers mean for investors
- Tips for spotting risks—and finding hidden opportunities
- Actionable ways to protect and grow your wealth
Why This Matters to You
Canada’s housing market is shifting, and if you own property—or want to build wealth through mortgage investing—this one’s especially worth watching. RBC’s latest earnings dropped a significant bombshell: mortgage delinquencies are rising. And Toronto? It’s leading the pack.
So, what’s happening? A phenomenon called “payment shock” is hitting homeowners. As mortgages come up for renewal, many people are walking into drastically higher interest rates—sometimes double or triple what they were paying just a few years ago. That sends monthly payments through the roof and stretches household budgets thin… in some cases, past the breaking point.
The fallout? More people missing mortgage payments. But with every challenge comes a chance to pivot. If you know how to read the signals, you can find opportunity. You can avoid risky bets, make smarter investment calls, and even position yourself for growth—while others are still reacting to the headlines.
In this blog, we’ll break down what all of this really means. Not in abstract numbers, but in the kind of insights that could actually affect your wallet. Whether you’re worried about renewing your own mortgage or dipping your toes into investing, it’s all about helping you read the room—and play your cards right.
Understanding Mortgage Delinquencies (And Why You Should Care)
Let’s keep it simple: a “mortgage delinquency” happens when someone hasn’t made a mortgage payment in at least three months. That’s the 90-day mark, and once you hit it, lenders start paying closer attention—which investors should too.
Why does it matter to you? Well, if you’re investing in mortgages or even just paying attention to home values, these missed payments can send up red flags. More delinquencies mean a bump in risk for mortgage-backed investments. For cities like Toronto, rising delinquencies also hint at trouble beneath the surface—financial stress, declining demand, maybe even a bump in foreclosures.
Here’s the thing most folks miss: delinquency data isn’t just noise. It’s a temperature check on a market. When numbers rise in a certain area, it’s often a sign that people there are tapping out—financially, anyway—which can mean property values might start slipping too. And for would-be investors? That’s actionable intel.
So, while “delinquency” may sound like a banker’s problem, it’s not. It’s your early-warning system. If you track the trends, you can protect your investment, avoid potholes, and maybe even spot some overlooked opportunities in steadier markets.
Toronto Leads Canada in Missed Mortgage Payments
RBC’s latest report confirmed what many had suspected: Toronto is at the top when it comes to missed mortgage payments. Right now, 0.39% of mortgage holders in the GTA are more than 90 days overdue—that’s higher than the national average of 0.30%, and it leaves cities like Vancouver in the dust at 0.23%.
Interestingly, these rising delinquencies aren’t coming from new borrowers or risky loans. RBC recently purchased HSBC Canada, but company leaders say it’s their longtime clients—especially those who bought in already pricey Toronto—that are feeling the crunch. These were folks playing by the rules… they just didn’t see this wave of rate hikes coming.
That’s important. It shows that the issue here isn’t reckless lending—it’s sheer affordability. Even solid mortgage holders are slipping as payments balloon. Still, RBC assures the public their overall mortgage portfolio is strong. In other words: this spike is concerning, but it’s not contagion—not yet, at least.
For homeowners and investors, this is the kind of caution light you shouldn’t ignore. Use it to adjust your strategy. Maybe take a second look at the GTA before committing… or pivot to regions showing more stability and resilience.
Ontario’s Rising Delinquencies: A Bigger Picture
Let’s zoom out for a minute. While Toronto is getting the headlines, the entire province of Ontario is flashing warning signs. New data from Equifax reveals that the province’s mortgage delinquency rate jumped more than 70% year-over-year—from Q1 2024 to Q1 2025 alone.
Toronto itself? It’s climbed from a razor-thin 0.08% in 2023 to 0.23% now. Still relatively low, sure—but it’s the biggest spike in a decade, and it’s turning heads for good reason. Across Ontario, more mortgage holders are missing payments, and it’s not just in one pocket.
So what does this mean if you’re living or investing in Ontario? It means budgeting is getting harder for many, and lenders may start tightening their requirements. If you own a rental or are considering buying, this could affect rental demand, interest rates, and even who qualifies for a mortgage.
Bottom line: these aren’t just stats for economists. They’re signals—real-time indicators that the financial load in Ontario is getting heavier. For investors, it’s a call to diligence. Do your homework. Look carefully at micro-markets and borrower profiles. In uncertain terrain, the smartest move is to stay ahead of the curve.
What’s Driving This? Welcome to Payment Shock
It sounds dramatic, but “payment shock” is a real—and growing—reason why mortgage delinquencies are spiking. Picture this: you took out a mortgage when rates were rock-bottom (thanks, pandemic), and now your renewal comes up… with an interest rate that’s more than doubled. Ouch.
For a lot of families, their budget simply can’t keep pace. That sudden jump in monthly costs—sometimes by hundreds, even thousands—pushes them into a financial corner. Combine that with inflation, rising grocery bills, gas, daycare, utilities (take your pick)—and yeah, something’s gotta give.
What’s more? Wages haven’t exactly skyrocketed to match. Many people are stuck with income levels that haven’t budged, meaning there’s just less wiggle room overall. When so many things cost more, those bigger mortgage payments hit even harder.
If you’re renewing your mortgage soon or thinking about investing in one, this is essential context. Understanding why people are struggling lets you adjust your plans, avoid shaky deals, and really grasp what’s happening beneath the “delinquency rate” headline.
Why Toronto Is Feeling It More Than Most
Out of everywhere in Canada, why is Toronto such a pressure point? Well, for starters—it’s expensive. Like, “second mortgage to afford daycare” expensive. And when you layer high living costs on top of rising mortgage renewals, you’ve got a recipe for real financial stress.
There’s also job vulnerability to factor in. Regions around Toronto, like Oshawa and parts of the GTA, rely heavily on industries like auto manufacturing. If those sectors lose speed or shed jobs, local homeowners feel it fast. If someone gets laid off just as their mortgage renews at a higher rate… you see where this is going.
Even people with good incomes are getting squeezed. Groceries up. Gas up. Insurance, utility bills, and—yup—property taxes, all up. So even steady earners are reassessing what they can afford.
That’s not to say it’s all doom. For mortgage investors, this pressure also creates pockets of opportunity. Smart investors are digging deeper into neighborhood data, borrower qualifications, and choosing investments with eyes wide open—not just chasing high returns, but balancing risk and reward.
This Isn’t 2008 (And That’s a Good Thing)
When people hear “mortgage delinquencies are rising,” their minds go straight to the worst-case scenario—like 2008. But let’s take a breath here. This is not that.
For starters, today’s homeowners generally have way better credit. Over two-thirds of RBC’s mortgage clients have credit scores north of 785. That’s excellent. And a solid credit score often means a history of on-time payments and responsible borrowing—way different than the wild lending that led to the last crash.
On top of that, most homeowners today have real home equity. Property values rose fast during the 2020–2022 period, and people who bought even a few years ago aren’t overleveraged. They’ve got equity buffers, meaning they’re less likely to walk away from their homes during tough times.
So yes, the market is shifting. Yes, some people are struggling. But this isn’t a case of widespread collapse. Think inconvenience, not implosion. And for mortgage investors, that means opportunity still exists—if you know where to look.
What It Means for Mortgage Investors Like You
If you’re 30 to 45, have a mortgage—or thinking of investing in one—this message is for you. Rising delinquencies sound scary on paper, but they don’t mean you should run for the hills. They mean: be smarter. Be choosier.
High-cost places like Toronto might carry more risk right now. But other cities—Halifax, for example—could be more stable. You don’t need to quit on mortgage investing altogether. You just need to broaden your lens, maybe adjust your map.
Diversification isn’t just some buzzword from your financial planner either—it’s your safety net. Don’t sink all your cash into one kind of borrower or location. Mix it up. Look for strong credit profiles and borrowers with lower loan-to-value ratios. Those folks are statistically more likely to stay current, no matter the economy.
And don’t get sucked into fear-driven headlines. Knowledge is your best defense. Remember—uncertainty doesn’t mean disaster. It can also mean you’re early to opportunity others haven’t noticed yet.
Looking Ahead: What the Experts Are Saying
According to the Canada Mortgage and Housing Corporation (CMHC), we may see delinquencies continue inching up into late 2025—then settle. Nothing dramatic, just a slow return to pre-pandemic levels. And frankly, that’s not unexpected, given how low they’ve been for years.
RBC says the trouble isn’t sweeping across the nation. It’s concentrated—mostly showing up in high-priced regions where borrowers are bumping into affordability ceilings post-renewal. It’s more of a pain point than a fault line.
Still, mortgage rates remain higher than pandemic-era lows, and homeowners up for renewal are facing seriously elevated costs. So if you’re investing, or planning to, this is a moment to keep your ear to the ground.
Track the trends. Know your risk zones. Most importantly: invest with intention. The game isn’t about waiting for perfect conditions. It’s about making smart, educated decisions in a market that’s constantly moving.
Conclusion: Your Next Move Counts
Mortgage delinquencies are rising—especially in Toronto—and it’s sparking serious conversations about homeownership, lending risk, and real estate investing in Canada. But it’s not reason to panic.
While high interest rates and living costs are definitely weighing on many homeowners, most aren’t in crisis mode. Credit remains strong, equity is solid, and the majority of borrowers are still on track. Think of this moment as a market correction—not a collapse.
So if you’re between 30 and 45, sitting on a mortgage—or eyeing the mortgage investment world—now’s the time to tune in. Use what you’ve learned here to make proactive, purposeful moves. Diversify where you invest. Understand who you’re lending to. Keep tabs on local markets and economic shifts.
You have more control than you think. This changing market doesn’t have to slow you down—it could be the moment that sets you up. Be the hero of your next financial chapter. The opportunity’s there. Go find it.
If you enjoyed this article, and is someone interested in learning more about investing, particularly about our mortgage fund, be sure to join our VIP list here.