Canada's consumer debt hits $2.56 trillion as mortgage delinquencies surge

Equifax Canada’s Q4 2024 Market Pulse Consumer Credit Trends Report shows that total consumer debt in Canada surged to $2.56tn by the end of 2024, a 4.6 percent increase from 2023.

Non-bank auto loans drove much of this growth, rising 11.7 percent year-over-year. The average non-mortgage debt per consumer reached $21,931, surpassing pre-pandemic levels.

The report also highlights a growing financial divide. While some borrowers benefit from lower interest rates, mortgage holders in Ontario and British Columbia face mounting financial strain.

Rebecca Oakes, vice president of Advanced Analytics at Equifax Canada, noted that “some consumers are doing better and seeing financial improvements from lower interest rates.”

However, she added that financial pressures have intensified for certain Canadians, particularly mortgage holders in Ontario and British Columbia.

While the overall numbers may not seem concerning at first glance, she explained that a deeper analysis reveals many are struggling with high living costs and mortgage renewals with higher payments.

Ontario mortgage holders face increasing delinquencies

More than 11,000 mortgages in Ontario recorded a missed payment in Q4 2024, nearly three times the figure in 2022. Mortgage holders who have fallen behind on payments are carrying significantly higher balances, reflecting the impact of higher-than-pre-pandemic interest rates.

The 90+ day mortgage balance delinquency rate in Ontario surged 90.2 percent year-over-year to 0.22 percent.

Other provinces saw smaller increases: British Columbia (37.7 percent), Quebec (41.2 percent), Manitoba and Saskatchewan (0.6 percent), and the Atlantic provinces (15.7 percent).

Alberta was the only province with a decrease of 3.6 percent.

Ontarians are also facing difficulties with other forms of debt. The 90+ day non-mortgage balance delinquency rate in the province increased by 46.1 percent year-over-year, higher than the national average increase of 18 percent.

Other provinces recorded smaller increases: British Columbia (21.6 percent), Quebec (23.3 percent), Alberta (6.1 percent), Manitoba and Saskatchewan (4.1 percent), and the Atlantic provinces (1.5 percent).

In Toronto, the 90+ day non-mortgage delinquency rate reached 2.06 percent, among the highest in major cities. 

“Mortgage holders will typically do everything they can to keep up with payments,” Oakes said. “The fact that we're seeing missed payments rise so sharply suggests deeper financial strain. Depending on the type of credit, missed payments have increased from 10 to 80 percent, compared to pre-pandemic levels.”

Mortgage market sees growth, but renewals pose challenges

New mortgage originations increased 39 percent year-over-year in Q4 2024, signaling a recovery in the Canadian housing market.

First-time homebuyers returned, with a 28.2 percent rise in purchases compared to Q4 2023.

The average loan amount for first-time buyers was 6.6 percent higher than the previous year, yet monthly payments declined by 7.9 percent to an average of $2,330.

Mortgage renewals and refinancing accounted for over 50 percent of new mortgage originations in Q4 2024, up 10.6 percent from 2023. The average balance on renewed mortgages rose by 2.9 percent from the previous year.

Many consumers renewing mortgages continue to face higher payments due to interest rates still being above pre-pandemic levels.

Approximately one million mortgages set for renewal in 2025, originating from low-interest-rate periods in 2020, may see significant payment increases despite recent rate reductions.

In Q4 2024, a quarter of mortgage holders faced a monthly mortgage payment increase exceeding $150 at renewal.

Credit card debt and consumer spending trends

Credit card debt rose 7.8 percent in Q4 2024, though at the slowest pace since 2022.

Seasonal spending in December reached a two-year high, with the average credit card purchase per cardholder, adjusted for inflation, increasing 2.2 percent from 2023 to $2,228.

Younger and lower-income Canadians are struggling the most, with rising missed payments on credit cards, auto loans, and lines of credit.

“Despite recent rate cuts and GST tax relief, challenges persist for certain consumers, particularly in consumer debt and housing,” Oakes said.

She also cited the potential impact of US tariffs, highlighting the need for a balanced approach to debt, affordability, and trade policies for economic stability in the coming year.

Debt and delinquency rates across age groups

The following table outlines average debt, year-over-year changes, and delinquency rates for different age groups in Q4 2024:

^{Source: Equifax Canada’s Q4 2024 Market Pulse Consumer Credit Trends Report}