Canadian mortgage delinquency falls as overall balance rises

by Ephraim Vecina04 Mar 2019

The number of Canadian mortgages unpaid for 90+ days has markedly declined in 2018, which accompanied an increase in the total outstanding mortgage balance, according to latest nationwide numbers from CMHC.

“Growth in the number of active mortgages increased at a slower rate, as rising interest rates, slower income and population growth have tempered homeownership demand,” according to Maxim Armstrong, the Crown corporation’s senior manager of socio-economic analysis.

“Delinquency rates on mortgages, credit cards, LOCs, and auto loans all moved lower, as robust labour market conditions continued to strengthen consumers’ ability to make regular debt payment.”

The CMHC national analysis, which covered Q2 2018, found that the number of delinquent mortgages fell by 10.4% year-over-year during that quarter, down to 16,913 loans. The total value of these unpaid accounts was $2.4 billion.

Read more: HELOC share of total Canadian credit expands significantly

Meanwhile, total outstanding mortgage balance stood at $1.232 trillion, growing by 5% annually. The total number of active mortgage loans also went up by 1.3% to 6 million, and the average loan value saw a 3.7% gain during the same time frame to reach $205,980.

However, the number of new mortgages opened during that quarter declined by 11.9% year-over-year, representing 205,000 new loans.

“HELOCs and LOCs were less exposed to consumers’ bankruptcy risk. Given the lower delinquency rates on all types of credit for mortgage holders and the falling share of consumers experiencing a credit degrade, vulnerabilities in the mortgage market remained low,” the report added.

 

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