There are troubling signs that more people will be unable to make mortgage payments on their house.
During the last quarter of 2024, there were 11,000 mortgage delinquencies in Ontario. That is almost 3 times the number in 2022 during the same period. This information is from Equifax Canada.
This is significant: historically mortgage delinquency on people’s principal residence was low. Home sweet home is sacred to most families and making mortgage payments has been an important priority.
Those that defaulted on credit card payments and car loans would still make their house mortgage payments.
Many have been predicting future mortgage defaults and now it appears those predictions were accurate. There are several strong factors that indicate accelerated mortgage missed payments will occur.
Many of these mortgages will come due and gone are the rock-bottom low interest rates. Higher interest rates on a mortgage are a serious challenge for many families.
Add in the increased risk of US tariffs that might cause some to lose their job, and the mortgage affordability problem expands. Also, I predict mortgage lenders will be stricter on who qualifies for a mortgage because of this economic uncertainty.
If many houses are put up for sale because of increasing mortgage rates as mortgages are renewed, that could upset the supply and demand realities of the market and houses will be harder to sell and prices will likely fall.
This is not meant to be a doomsday article but to signal many families might have a mortgage problem. We encourage families to plan so they can navigate the more challenging times ahead.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com
