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Economic Viewpoint

The Outlook for Mortgage Arrears in a Higher-Rate World

July 9, 2026
Kari Norman
Senior Economist
  • Mortgage arrears—mortgage payments that are at least 90 days overdue—have risen from pandemic-era lows in Canada but remain modest by historical standards, reflecting a normalization rather than a broad deterioration in household finances.
  • The mortgage renewal wall—materially higher borrowing costs at renewal—particularly affects recent homebuyers with larger outstanding balances and investors facing softer rental conditions.
  • Arrears continue to track macroeconomic conditions, with unemployment, interest rates, home price dynamics and inflation playing central roles in shaping borrower stress.
  • Looking ahead, easing renewal pressures and stable labour market conditions are expected to support a stabilization in arrears, with a gradual reduction through 2027 and 2028.

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The Outlook for Mortgage Arrears in a Higher-Rate World (PDF, 434 KB)
NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.