OSFI Raises Concerns Over Potential Mortgage Defaults in Canada

The Office of the Superintendent of Financial Institution (OSFI) has released its Annual Risk Outlook for 2024/2025, highlighting mortgage credit defaults as a primary concern for Canada’s economy. With 76% of mortgage debt set to renew by the end of 2026, the bank regulator warns that the impact will be most significant for those who took on substantial debt during the record-low interest rate period between 2020 and 2022.

OSFI has identified variable rate mortgages with fixed payments (VRMFP) as a specific area of concern, estimating that roughly 15% of mortgage debt is exposed to these terms. The rapid increase in interest rates has led to negative amortization for many of these loans, with borrowers seeing their debt increase rather than being paid off.

The regulator expects the rise in mortgage payments to result in a higher incidence of residential mortgage loans falling into arrears or defaults. Signs of payment stress have already been observed in non-performing loans, with delinquency rates climbing in markets such as Toronto.

“If mortgage rates remain elevated, the financial commitment required by borrowers to return to their contractual amortization (for example, lump sum payment, mortgage payment increase) may put financial strain on many of those households,” the regulator wrote.


Information for this story was found via and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

2026 Could Be Gold’s Biggest Year Yet!? | Ryan King – Equinox Gold

Gold Is Screaming Higher While Currencies Burn | Simon Ridgway – Rackla Metals

We Have the Highest-Grade Antimony Deposit in North America!? | Jim Atkinson -Antimony Resources

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Liberals Still Don’t Know What to Do About the Housing Crisis

Nova Scotia MP Sean Fraser, recently appointed to the housing file, is under scrutiny to...

Tuesday, August 29, 2023, 03:01:00 PM

Trudeau Still Doesn’t Know How to Fix the Real Estate Problem

When asked about the government’s plans to address the commodification of housing in his country,...

Monday, October 23, 2023, 03:41:00 PM

Toronto’s Housing Crash Isn’t a Correction—It’s a Reckoning

Toronto’s housing market is unraveling with a speed that has left sellers scrambling and policymakers...

Wednesday, May 14, 2025, 02:14:00 PM

Justin Trudeau Drops GST From New Rental Builds

In an upcoming announcement, Prime Minister Justin Trudeau is set to declare the removal of...

Thursday, September 14, 2023, 01:26:15 PM

Liberals’ Decision To Extend Ban On Foreign Homeownership Draws Criticism, Exposes Glaring Issues

On Sunday, Deputy Prime Minister and Minister of Finance Chrystia Freeland announced that the federal...

Monday, February 5, 2024, 11:44:00 AM