credit and debt
NO CAUSE FOR CONCERN (YET)
The mortgage arrears rate in both Canada and British Columbia remains low from a historical perspective, but it’s trending in the wrong direction.
The mortgage arrears rate is a useful, though lagging, indicator, as it measures the proportion of mortgages that are 90 days or more behind on their payments. So while we can see how many Canadian borrowers were falling three months or more behind through the second quarter of 2024, it doesn’t necessarily give us a gauge for how many borrowers are starting to fall behind today. With that said, we can observe a pretty clear long-term trend of a declining arrears rate in Canada over the past decade-plus.
Canada’s arrears rate today, at just 0.19%, is lower than at any point in the decade leading up to the pandemic. Here in British Columbia, the arrears rate has held below the national average throughout the same period, and sits at just 0.16% today. One thing to keep an eye on, however, is the more recent trend of an increase. Both nationally and here in BC, the rate bottomed out in the summer of 2022, at 0.14% and 0.10% respectively, and has been rising ever since. Given the current level of arrears is still quite low, this isn’t overly alarming, but the upward trend is clear and could spell some pain for borrowers and lenders alike in the coming months.
CHECKING THE ARREAR-VIEW MIRROR
0.9%
2020-2022 average 0.19%
2022-2024 average 0.17%
2011-2020 national average 0.29%
0.8%
0.7%
0.6%
0.5%
0.4%
0.3%
0.31%
0.2%
0.17% 0.16% 0.14% 0.19%
0.1%
0.0%
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020 2021
2022
2023 2024
CANADA
BC
AB
ON
QC
DATA: MORTGAGE ARREARS RATE, MONTHLY, SELECT PROVINCES & CANADA
SOURCE: CANADIAN BANKERS ASSOCIATION
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