00:00:00:00
[Audio: Bright percussive music plays.]
[Visual: The sun shines on a row of newly built houses with "For Sale" signs. Traffic flows through a city intersection at night. A condominium tower's windows reflect the blue sky. A crane rises over a high-rise building under construction.]
[Text on screen: "Ask an expert."]
[Visual: Joelle Hamilton sits behind a desk in front of a blue background. She has medium-length black hair and wears a black long-sleeved top. A tablet, a keyboard and a mug sit on the desk top.]
[Visual: A box that reads "Joelle Hamilton, Communications and Marketing, CMHC" appears briefly.]
00:00:06:00
JOELLE HAMILTON: Today, we're talking about something that sounds technical, but actually tells us a lot about how Canadian households are really doing financially. Mortgage arrears. You may have seen headlines about rising arrears, but what does that actually mean? Is it a crisis? How worried should we be? And why do different sources seem to report different numbers? Let's break it down.
[Audio: Pensive electronic music plays.]
[Text on screen: "What are mortgage arrears?"]
[Visual: Tania Bourassa-Ochoa sits in a bright office. She has long wavy blonde hair and wears a beige vest with a black blouse and slacks.]
[Visual: A box that reads "Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC" appears briefly.]
00:00:34:00
TANIA BOURASSA-OCHOA: Financial stress around mortgage payments usually builds over time. At first, homeowners are on track, making their payments as scheduled. If financial pressure increases, someone might miss a payment. This is called a delinquency. Delinquencies happen in stages, 30, 60, 90 days late. These are considered early-stage delinquencies.
[Visual: A timeline with simple icons reads, "30 -> 60 -> 90 days."]
[Visual: Tania sits in the office.]
Once a mortgage reaches 90 days past due, we generally say it is in arrears.
[Visual: A woman holds receipts while pressing buttons on a calculator, a woman drinks from a mug while reading a bill and a couple checks documents while working on a laptop.]
If payment problems continue, for example, 120 days late or more, the situation becomes more serious.
[Visual: Tania sits in the office.]
At the most severe end is insolvency, when someone can no longer meet their financial obligations. Mortgage arrears sit between early warning signs and the worst-case scenario, an important indicator of rising financial stress.
[Audio: Rhythmic electronic music plays.]
[Text on screen: "Why arrears matter (And what they really signal)"]
[Visual: Joelle sits behind the desk.]
00:01:37:00
JOELLE: Mortgage arrears aren't just about missed payments. They're a signal of financial stress.
[Visual: Tania sits in the office.]
00:01:42:00
TANIA: When a household reaches the point of mortgage arrears, it usually means they've already tried other coping strategies first.
[Visual: A professional talks to a couple while pointing at a computer screen, a woman takes a stack of documents out of an envelope and a man points to a tablet while speaking to a woman.]
So, by the time mortgage payments are missed, it often means those safety nets are running out or gone.
[Visual: Tania sits in the office.]
Arrears can affect someone's credit score, limit future borrowing options, or even transferring to another lender for renewal. And if the situation continues, it increases the risk of foreclosure.
[Text on screen: "Why arrears are a 'rear-view mirror' indicator"]
[Visual: Joelle sits behind the desk.]
00:02:17:00
JOELLE: One really important thing to understand: mortgage arrears are what economists call a lagging indicator.
[Visual: Tania sits in the office.]
00:02:25:00
TANIA: So put simply, they tell us more about financial stress that has already been building rather than what's about to happen next.
[Visual: A man and a woman study charts on a desk.]
[Visual: Tania sits in the office.]
People don't usually miss their mortgage payment the first month something goes wrong financially. They prioritize mortgage payments above all else.
[Visual: A dollar sign next to an arrow pointing down icon appears with the words "cutting back on spending." A bank icon with a dollar sign in it appears with the words, "Using savings." A credit card icon appears with the words "Relying on credit cards or lines of credit."]
They try to adjust spending. They dip into their savings. They'll rely on credit cards or lines of credit.
[Visual: Tania sits in the office.]
So we'll often see stress show up first in things like credit cards or auto loans, for example, and only later in mortgage arrears. So when arrears rise, it's like looking in the rear-view mirror. It confirms that pressure has been building up for some time.
[Text on screen: "Why are there so many different arrears numbers?"]
[Audio: Soft jazz music plays.]
[Visual: Joelle sits behind the desk.]
00:03:17:00
JOELLE: If you've ever tried to look up mortgage arrears data, you've probably noticed something confusing. There isn't just one number. That's because Canada has several different data sets and they each capture different parts of the market.
[Visual: Tania sits in the office.]
00:03:31:00
TANIA: Each data set gives us a different lens on household financial stress. That's why it's important to understand what each one actually covers.
[Text on screen: "Canadian Bankers Association Data"]
The CBA data set includes data from nine large Canadian chartered banks, including the eight largest. That represents close to 80% of outstanding mortgage loans. It's widely cited and has a long history, which makes it very useful for tracking trends over time. But it doesn't include credit unions or many other non-bank lenders, so it doesn't capture the entire market.
[Text on screen: "Equifax Canada Data"]
Equifax provides one of the broadest views of the market. It covers roughly 85%–90% of mortgages, including banks, credit unions and many non-bank lenders.
[Visual: A professional gives a presentation to colleagues in an office. A young woman speaks to other young adults in a conference room.]
CMHC often uses this data set in our Residential Mortgage Industry Report because it gives us a more complete national and regional picture.
[Visual: Tania sits in the office.]
[Text on screen: "Non-Bank Mortgage Lenders Survey Data"]
This data set focuses specifically on lenders outside the major banks, so it includes credit unions, mortgage finance companies and alternative lenders. These lenders often serve borrowers with higher-risk profiles, so arrear rates tend to be higher in the data set. That doesn't make it worse data, it just highlights part of the market that other data sets may miss.
[Text on screen: "Why all three matter together"]
[Audio: Upbeat funk music.]
[Visual: Joelle sits behind the desk.]
04:59:00:00
JOELLE: So, which number is the right one?
[Visual: Tania sits in the office.]
00:05:04:00
TANIA: There isn't a single "perfect number." Each data set tells part of the story. If we only look at bank data, we might understate stress amongst higher-risk borrowers. And if we only look at non-bank lenders' data, we might overstate overall market stress.
[Visual: Two colleagues talk while walking through an office building and a man works on a laptop at home.]
[Visual: Tania sits in the office.]
By looking at all three together, we get a more accurate and balanced understanding of what's happening across the housing system.
[Text on screen: "International context: Why is Canada different?"]
[Visual: Joelle sits behind the desk.]
00:05:38:00
JOELLE: There's another important piece of context when we talk about mortgage arrears in Canada: how our system compares internationally.
[Visual: Tania sits in the office.]
00:05:46:00
TANIA: Canada has what are called recourse mortgages.
[Visual: On a split screen, an arrow leads from "Canada" to "mortgage + other assets," while another arrow leads from "Other countries" to "house only."]
That means if someone defaults on their mortgage, the lender could legally pursue other assets, not just the borrower's home, in order to recover debt.
[Visual: Tania sits in the office.]
In many other countries, mortgage systems are non-recourse or have much weaker recourse.
[Visual: A woman takes an object out of a moving box in a packed-up house while a man carries an open moving box. Later, the woman hands the man a set of house keys and they shake hands.]
And so in those cases, borrowers can sometimes walk away from their mortgage by handing back the keys with fewer financial consequences.
[Visual: Tania sits in the office.]
That difference matters. In Canada, recourse creates a strong incentive to prioritize mortgage payments, even when finances are tight.
[Visual: A Canadian flag waves in a suburb.]
[Visual: Tania sits in the office.]
As a result, Canada has historically had very low mortgage arrears compared to other countries. When analysts look at mortgage arrears here, we need to consider three things.
[Text on screen: "The current level compared to history, The trend – are they rising or falling? The pace of change – how fast are they moving?"]
The current level compared to history. The trend. Are they rising? Are they falling? And the pace of change. How fast are they moving? That context helps avoid misinterpreting what the numbers are really telling us. Mortgage arrears are one of the clearest signals that we have of household financial stress. When they move, it tells us something important is happening beneath the surface.
[Text on screen: "Important context + human lens"]
[Audio: Light hopeful music.]
[Visual: Joelle sits behind the desk.]
00:07:10:00
JOELLE: Behind every data point is a household, a family, a real person.
[Visual: Tania sits in the office.]
00:07:16:00
TANIA: Financial stress can take a real emotional toll.
[Visual: An elderly couple discusses a document with a man in a suit; a young couple speaks with an advisor and two people speak to each other across a table.]
[Visual: Tania sits in the office.]
If someone is struggling with debt or finding it difficult to make ends meet, there are supports available, including non-profit credit counsellors and consumer protection resources like the Financial Consumer Agency of Canada.
[Visual: Joelle sits behind the desk.]
00:07:35:00
JOELLE: Mortgage arrears are more than a statistic. They're a signal. They're a warning light. And, they help us understand the real financial pressures facing Canadian households.
[Text on screen: "Subscribe on YouTube"]
[Visual: The CMHC logo appears above the Canada wordmark.]
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