Mortgage delinquencies "worm has turned" warns Equifax

More Canadians are running into serious issues with their mortgage payments according to a new report.

Consumer 90-day mortgage delinquencies rose 1.5% to 0.18% in the fourth quarter of 2018 compared to a year earlier while the comparable non-mortgage rate increased 0.4% to 1.07%.

The figures from Equifax follow two significant quarterly increases in consumer bankruptcies.

“As we expected, the worm is turning in the Canadian credit market,” said Bill Johnston, Vice President of Data & Analytics at Equifax Canada. “Bankruptcies are up 15% in the last half of 2018 and the small increase in delinquency rates mask some underlying weakness. Rising delinquency is likely to become the norm in 2019.”

Total consumer debt including mortgages also increased to $1.906 trillion in Q4, up from $1.821 trillion in Q4 2017 (+4.6 per cent). The average non-mortgage holding for consumers has reached $23,520, a 3% increase from the same quarter last year.

Mortgage delinquencies remained very low but some regions have posted a sharp rise; Manitoba was up 19%, Saskatchewan up 9%, Quebec up 4%, and Ontario up 2%.

Seniors delinquencies increased
The share of mortgages held by Canadian seniors saw a rise in the 90-day delinquency rate, the third straight quarter of increases.

In Q4, the delinquency rate for seniors was up by 7.2% and the increases are gaining momentum.