Canada's Mortgage Arrears Rate Hits Decade High

Canada's mortgage arrears rate has reached its highest level in over a decade, with 14,061 bank mortgages at least 90 days past due in May 2026. This marks a 27.2% year-over-year increase, the largest growth since the 2008-2010 recession.

The national arrears rate rose to 0.29%, up one basis point from April and seven points higher than last year's figure. The rate has more than doubled since hitting a record low of 0.14% in 2022, its highest level since August 2016.

Bank of Canada research suggests that the labour market is the primary driver of mortgage arrears, with a one percentage point increase in unemployment leading to a 0.1 percentage point rise in the arrears rate. Canada's national unemployment rate stood at 6.7% in March 2026.

The Canadian Bankers Association frames the current situation as manageable, noting that more than 99% of bank mortgage holders remain in good standing. However, a structural gap in lender data and elevated unemployment rates raise concerns about the true extent of arrears exposure across the market.