Nearly 1.4 million Canadians missed a credit payment as household debt climbs past $2 trillion
Nearly 1.4m Canadians missed a credit payment in the second quarter of 2025, underscoring growing financial stress despite early signs of stabilization in credit performance, data from Equifax Canada Market Pulse Quarterly Consumer Credit Trends and Insights showed.
The number was 7,000 fewer than the previous quarter but 118,000 higher than one year ago.
Rebecca Oakes, vice president of Advanced Analytics at Equifax Canada, said, “While the overall delinquency rate appears to be leveling off, the underlying story is far more complex.”
She noted that there is a growing divide between mortgage and non-mortgage consumers, with younger Canadians facing financial strain from a slower job market and rising costs.
Younger consumers remain the most vulnerable.
Canadians under 36 carried an average non-mortgage debt of $14,304 in Q2, a 2 percent increase from last year. Their 90+ day non-mortgage delinquency rate jumped to 2.35 percent, up 19.7 percent year-over-year and 1.3 percent from the previous quarter.
This group posted the highest delinquency rates on credit cards and auto loans.
Oakes said, “The affordability crisis seems to be hitting younger consumers the hardest.” She explained that many are struggling to stay afloat due to rising costs, employment uncertainty, and limited access to affordable credit.
The pressure is most acute among non-mortgage holders, who were nearly twice as likely to miss a payment compared with mortgage holders (one in 19 versus one in 37).
In 2019, non-mortgage delinquencies were around 45 percent higher than mortgage holders, but by Q2 2025 the gap widened to more than 96 percent.
Regional pressures intensify
Ontario reported the sharpest rise in non-mortgage delinquencies, with a 90+ day balance delinquency rate of 1.75 percent in Q2, 15.2 basis points above the national average.
Toronto, the GTA, and Hamilton led the increase, with rates climbing 36.8, 39.1, and 30.7 basis points, respectively.
Alberta followed closely, with delinquency rates reaching 1.98 percent — 38.5 basis points higher than the national average.
Edmonton, Fort McMurray, and Calgary all surpassed the provincial average with increases of 29.4, 37.1, and 26.3 basis points.
Oakes noted, “In areas like Alberta, the gap between the two groups is much wider, with non-mortgage holders showing greater financial stress than their neighbours with mortgages.”
She added that in Ontario, both mortgage and non-mortgage consumers are experiencing substantial financial strain.
Mortgage delinquency rates also rose in Ontario and British Columbia, at 0.27 percent and 0.19 percent respectively, though growth decelerated compared to previous quarters.
Other regions remained below pre-pandemic levels.
Debt and spending trends
Total consumer debt climbed to $2.58tn in Q2, up 3.1 percent year-over-year.
Average non-mortgage debt per consumer rose to $22,147 as households faced higher vehicle, grocery, mortgage, and rent costs.
Credit card spending showed divergence between groups.
Adjusted for inflation, average spend per consumer in June was just over $2,100, a 0.4 percent decline from June 2024. Mortgage holders cut back on spending, while non-mortgage holders saw a slight year-over-year increase of 0.14 percent.
Credit and lending behaviour
New credit activity slowed despite typical Q2 seasonality. New credit card originations declined 4.5 percent year-over-year, with growth concentrated in super-prime consumers holding scores of 750 or higher.
The mortgage market remained dominated by renewals and refinancing. New originations rose 15.3 percent year-over-year, with renewals of pandemic-era low-rate mortgages up 27 percent.
First-time homebuyer activity increased 1.8 percent nationally, but declined in Ontario, British Columbia, and Alberta.
The average loan size for first-time buyers grew 4 percent from last year to nearly $430,000.
Auto loan originations increased 2.9 percent year-over-year in Q2, largely limited to low-risk consumers. Lenders tightened approval standards, with 21 percent of applications undergoing multiple reviews, nearly double the pre-pandemic level.
The average new loan amount rose to $35,586, up $1,567 from Q2 2024, reflecting higher vehicle prices.
“Delinquency rates may be plateauing, but we’re not out of the woods yet,” said Oakes.
She pointed to high vehicle costs, food inflation, and regional economic pressures in Ontario and Alberta as factors weighing on households.
Oakes added that younger consumers, already dealing with job market challenges and rising debt, will likely continue to face credit performance issues in the second half of the year.
