Despite stabilizing levels of delinquencies, consumer credit data highlights issues
Many Canadians continue to face oversized financial challenges compared to the population at large, with some concerning data related to their credit usage.
While consumer credit performance in Canada is showing early signs of stabilization, according to second quarter data from the Equifax Canada Market Pulse Quarterly Consumer Credit Trends and Insights, a deeper financial divide is emerging.
“While the overall delinquency rate appears to be leveling off, the underlying story is far more complex,” says Rebecca Oakes, vice president of Advanced Analytics at Equifax Canada. “We continue to see a growing divide between mortgage and non-mortgage consumers — and continued financial strain among younger Canadians, who are facing a slower job market and rising costs.”
Close to 1.4 million Canadians missed a credit payment in Q2, about 7,000 fewer than the previous quarter. However, that figure still represents 118,000 more missed payments than a year earlier. Non-mortgage holders were nearly twice as likely to miss a payment compared to mortgage holders (1 in 19 vs. 1 in 37).
Looking back at previous reports, missed payments for non-mortgage holders were about 45% higher than mortgage holders in 2019 but by Q2 2025 that gap has surged to 96%.
At the same time, debt levels keep climbing with total consumer debt at $2.58 trillion, up 3.1% year-over-year. Average non-mortgage debt per person rose to $22,147, while the cost of essentials including vehicles, groceries, mortgages, and rent, continues to pressure household budgets.
Consumers under 36 now carry an average of $14,304 in non-mortgage debt, up 2% year-over-year and their delinquency rate hit 2.35% which is almost 20% higher than a year ago and 1.3% higher than last quarter.
“The affordability crisis seems to be hitting younger consumers the hardest,” Oakes says.
READ MORE: Younger Canadians are buying homes, but overall credit market remains fragile
Credit card spending has softened overall, falling 0.4% (inflation-adjusted) compared to June 2024, but the picture is not uniform with non-mortgage holders increasing their spend slightly (up 0.14%), while mortgage holders cut back.
Regional dynamics also show widening stress with Ontario’s non-mortgage delinquency rate rising to 1.75% led by Toronto, the GTA, and Hamilton. Alberta’s delinquency rate rose even higher, to 1.98%, driven by migration, economic headwinds, and July’s rise in unemployment.
Meanwhile, mortgage delinquency rates remain highest in Ontario (0.27%) and British Columbia (0.19%), although growth has slowed.
Credit demand also slowed with credit card originations down 4.5%. Only super-prime consumers saw growth, signaling tighter lending standards. Mortgages were largely driven by renewals and refinancing, up 15.3% year-over-year, while first-time buyers remain under pressure from higher loan sizes, now averaging close to $430,000.
Auto lending told a similar story with originations up 2.9%, mostly limited to low-risk borrowers. Average loan amounts jumped to $35,586 as vehicle prices crept higher, and stricter approvals meant 21% of applications underwent multiple reviews — twice the pre-pandemic rate.
“Delinquency rates may be plateauing, but we’re not out of the woods yet,” Oakes concludes. “High vehicle costs, food inflation, and regional economic pressures — especially in Ontario and Alberta — continue to weigh on Canadian households. As younger consumers struggle with job market challenges and rising debt, we expect credit performance to remain a key issue for younger consumers well into the second half of the year.”
