Mortgage delinquencies in Windsor area increase 27 per cent

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Canadian consumer debt hit a record $2.56 trillion by the end of the fourth quarter of 2024 with Ontario residents struggling more than anywhere else to meet their payments.

Equifax Canada’s fourth quarter Consumer Credit Trends Report found Ontario experienced a 90.2 per cent surge in the those who are now delinquent for 90 days or more in making mortgage payment. That’s about three times higher than the next closest province (B.C. 37.7 per cent).

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“Mortgage holders will typically do everything they can to keep up with payments,” said Equifax Canada vice president of advanced analytics Rebecca Oakes.

“The fact that we’re seeing missed payments rise so sharply suggests deeper financial strain. Depending on the type of credit, missed payments have increased from 10 to 80 per cent, compared to pre-pandemic levels.”

Overall, 11,000 Ontarians missed a mortgage payment in the fourth quarter. That’s three times the number compared to 2022.

Oakes said should a tariff war break out between Canada and the U.S., the numbers will likely only get uglier.

“If tariffs come, businesses will put off investments, people spend less and production will drop leading to unemployment increases,” Oakes said. “We know losing an income is a big driver of debt.

“The effects of tariffs will impact specific industries and geographical locations differently.”

Despite having the highest unemployment rate in Canada for much of 2024, Windsor area residents are faring better than their provincial colleagues. Oakes credits that to the area’s housing prices still be significantly lower than elsewhere. “Looking at what’s happening at the overall debt level, the Windsor area is not seeing the same type of growth in non-mortgage debt as we’re seeing in the other regions,” Oakes said. “It’s kind of stable year over year.

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“The mortgage deliquency rates in Windsor are up around 27 per cent compared to 90 per cent for Ontario. It’s going up at a much slower rate.”

However, Windsorites are starting to rack up non-mortgage debt on auto loans, credit cards and lines of credit.

“The challenge I think for the Windsor area is we’re seeing a little bit of growth in missed payments,” Oakes said. “If we look at certain products, such as credit cards, that does tend to have a higher missed payment rate than Ontario and across Canada.

“Generally speaking, (Windsor is) not faring too badly in comparison to Ontario.”

Oakes added the increase in auto loans across the country is also a sign consumers feel with interest rate cuts, vehicles are becoming more affordable.

Oakes noted there’s a growing financial divide in the country.

“There’s an increasing number of people showing signs of financial stress,” Oakes said.

“If you’re a homeowner, particularly in Ontario, we’re seeing things worsening.

“Those individuals are struggling, especially with higher mortgage balances. We’re starting to see missed payments rising.

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“We’re also seeing those who rent or don’t own a home, lower income and young people are continuing to see their stress grow. That group could be at risk.”

At the other end of the spectrum are those without mortgages or who have lower balances from pre-pandemic and Oakes said they’re doing better, especially with declining interest rates.

With balances being on average 2.9 per cent higher on mortgage renewals than in 2023, the average monthly payment increased $150 in the fourth quarter despite the interest rate cuts.

However, there were also some positives in 2024 as mortgage originations increased 39 per cent year over year. The number of first-time home buyers also increased by 28.2 per cent.

The average monthly mortgage payment in Canada was $2,330 per month, a decrease of $200.

Credit card debt increased 7.8 per cent, the slowest rise since 2022. The average credit card debt being carried by Canadians is $21,931.

“Despite recent rate cuts and GST tax relief, challenges persist for certain consumers, particularly in consumer debt and housing,” Oakes said.

“The added uncertainty of U.S. tariffs underscores the need for a balanced approach to debt, affordability, and trade. The coming year will be critical for Canada’s economic stability.”

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