In its Q2 2025 Client Credit score Traits name, Equifax mentioned Canada’s economic system is exhibiting pressure as progress slows and households face greater residing prices.
“GDP noticed a noticeable decline within the second quarter, each total and on a per-capita foundation,” mentioned Rebecca Oakes, Vice-President of Superior Analytics at Equifax Canada. “There are loads of challenges by way of buying and selling circumstances throughout Canada.”
Home demand has cushioned the macroeconomic outlook, with authorities spending and client outlays serving to to forestall a deeper downturn, Oakes mentioned.
Nevertheless, the labour market is weakening, with over 60,000 jobs shed in August and unemployment rising to 7.1%, in accordance with Statistics Canada.
“An increase in unemployment is a shock issue by way of credit score measures, similar to cost behaviours,” Oakes mentioned, pointing to the truth that rising unemployment will instantly affect many households’ skill to satisfy greater mortgage funds.
On the credit score aspect, Oakes famous that total client debt is up about 3% year-over-year, although progress has slowed amid weaker inhabitants positive factors and tighter credit score use.
Equifax additionally pointed to a rising divide between shoppers with and with out mortgages: debt saved rising for non-mortgage holders in Q2, whereas mortgage holders saved will increase extra contained.
Renewals, not new lending, driving mortgage exercise
Equifax mentioned Canada’s whole mortgage steadiness is about $1.9 trillion, up 2.4% year-over-year, with the typical steadiness at $247,000.
The agency famous that even with decrease charges and slight worth drops, first-time consumers proceed to sit down on the sidelines in anticipation of improved affordability.
Even so, first-time purchaser exercise edged up 1.8% in comparison with final yr, although participation fell in Ontario, B.C. and Alberta. These coming into the market are borrowing extra, with the typical first-time mortgage quantity up 4% year-over-year to just about $430,000.
“Mortgage progress stays sluggish, and total a restoration has not but materialized,” mentioned Swarnima Pandey, Analytics Insights Supervisor at Equifax Canada.
As an alternative, renewals have turn out to be the principle driver of mortgage exercise by way of the second quarter of 2025. Equifax information present renewals and refinancings surged 27% year-over-year, with new mortgage originations up 15.3% largely on the again of this renewal wave.
Pandey famous that in a number of markets, the majority of renewals are leading to cost shocks as debtors depart ultra-low pandemic charges for mortgages that add a whole lot to month-to-month prices.
Whereas mortgage holders have largely saved different credit score use in examine, renewals are testing family budgets in methods not seen in additional than a decade.
“Immediately most renewals are in cost shock,” mentioned Pandey. “Debtors are renewing at a lot greater charges than their authentic loans, particularly for many who secured fastened charges in the course of the pandemic.”
Dangers concentrated in key markets
For lenders, Equifax confused that the influence of renewals varies extensively by area.
Delinquencies are concentrated within the provinces the place residence costs surged most in the course of the pandemic, particularly Ontario and British Columbia. Common mortgage values there are about 20% above the nationwide common, leaving mortgage holders extra uncovered to rising charges.
Equifax reported Ontario’s 90+ day mortgage delinquency charge reached 0.27% in Q2, whereas B.C.’s was 0.19% — each greater than final yr. By comparability, most different provinces stay beneath pre-pandemic delinquency ranges, highlighting how dangers are concentrated within the high-value markets.
“Excessive-value mortgages are the principle wrongdoer,” Pandey defined. “The Canadian market total appears to be like regular, however the actual danger is concentrated within the high-value markets that ran hottest in the course of the pandemic.”
Kathy Catsiliras, Vice-President of Analytical Consulting at Equifax, added that the slowdown in gross sales is compounding the difficulty. “The shortage of gross sales exercise in Ontario and B.C. has had a big influence on total mortgage lending,” she mentioned. With resale exercise subdued, the market stays successfully on maintain, awaiting both charge aid or an enchancment in affordability.
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credit score traits delinquencies equifax Canada Kathy Catsiliras Market Pulse client credit score traits rebecca oakes renewals steven brennan Swarnima Pandey
Final modified: September 10, 2025
