Toronto Mortgage Crisis 2026? What the Data Really Says About Renewals and Arrears

Mortgage arrears are rising faster in the GTA

CMHC data shows 2,797 mortgage borrowers in arrears in the GTA in Q3 2025, compared with 662 in Q3 2022 — more than a fourfold increase. The overall GTA delinquency rate was still relatively low at about 0.26%, so the concern is the direction and concentration of the trend rather than widespread default.

CMHC projects Toronto mortgage arrears at roughly 0.34% by the end of 2026, reflecting a combination of high debt, softer home prices, slower resale conditions and labour-market pressure.

Why Toronto is more exposed

CMHC points to several pressures working together: high household debt caused by expensive housing, falling prices and slower sales, investor carrying costs combined with softer rents, and a weaker GTA labour market. When a homeowner needs to sell or refinance, a smaller equity cushion reduces flexibility.

The renewal wave is not fully finished

The Bank of Canada estimates that about 12% of all outstanding Canadian mortgages — the remaining five-year fixed-payment mortgages taken out during the pandemic — will renew over the next 12 months. On average, those borrowers are expected to see payments increase by about 15%.

Many households should be able to absorb that increase. The problem is sharper where income growth has been limited, other debt has increased, or home values have fallen enough to reduce refinancing options.

Why lower home values matter for refinancing

A standard renewal with the existing lender is different from refinancing. Refinancing may be needed when a homeowner wants to increase the loan amount, restructure debt or change financing. In those situations, current equity and qualification can become much more important.

The Bank of Canada estimates that at current home prices about 4% of Canadian borrowers renewing in 2027 could be unable to refinance. In the Toronto area the estimate is about 9%. If home prices fell another 10%, the Toronto-area estimate would rise to roughly 12%.

Is this really a mortgage crisis?

At the national level, the data does not currently point to a systemic mortgage collapse. TransUnion reported a 0.19% 90+ day mortgage delinquency rate in Q1 2026. The Bank of Canada likewise says overall mortgage arrears remain low, although stress is much higher among more leveraged borrowers.

A more accurate description is a concentrated refinancing and renewal risk in the GTA, particularly among borrowers with large mortgages, low equity, weak income growth or additional consumer debt.

What homeowners can do before renewal

• Start early. Ask for renewal options before the final month and compare alternatives.
• Stress-test the payment. Run the household budget at several realistic mortgage rates.
• Know the home's current value. Market value determines the real equity buffer.
• Control expensive consumer debt. Additional debt can reduce qualification flexibility.
• If selling is possible, evaluate it before it becomes urgent. Understand likely net proceeds while you still have choices.

What this means across Victoria's service areas

Housing conditions differ across Oakville, Burlington, Milton, Mississauga, Etobicoke and Hamilton. Toronto remains an additional service market. Inventory, property type and recent comparable sales can produce very different equity outcomes even when mortgage rates are identical.

Data sources

• CMHC: Mortgage renewal wave strains some regions and borrowers
• Bank of Canada: Financial Stability Report 2026
• TransUnion Canada: Q1 2026 mortgage delinquency data