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Mortgage defaults fall as lending rules get tougher

As the federal government prepares to make accessing mortgage loans even harder, its housing agency reports that defaults and delinquent mortgage rates are declining to minuscule levels, even in Canada’s most expensive cities.
Mortgage delinquency rates were very low in Toronto and Vancouver during the fourth quarter of 2016, according to the report from Canada Mortgage and Housing Corporation that surveyed national consumer debt data.
The delinquency rate in Toronto was just 0.12 per cent, and it was 0.15 per cent in Vancouver, compared to a national average of 0.34 per cent. 
The delinquency rate was also above the national level in some East Coast cities: Charlottetown (0.55 per cent), Halifax (0.54 per cent) Moncton, (0.71 per cent) and Saint John (0.86 per cent), among them.
It was also higher than national figures across most of the Prairies where a slump in resource prices have affected the economy, including Calgary (0.35 per cent), Edmonton (0.52 per cent), Regina (0.47 per cent), and Saskatoon (0.51 per cent).
The 0.34 per cent national average delinquency rate for the end of 2016 was little changed from the 0.35 per cent rate observed at the end of 2015 and the end of 2014.
Despite the apparent ability of Canadians to meet mortgage obligations, the federal government is poised to extend a mortgage stress test to all homebuyers, regardless of their income or equity. The stress test will require buyers to qualify for their mortgage at five-year rates about twice as high as available on the open market.
At the end of 2016, the average national monthly payment for a new mortgage was $1,328, according to CMHC. Toronto homeowners paid $1,826, while the average monthly payment in Vancouver was $1,936, the highest in the country. The lowest mortgage payments – and the highest delinquency rates – were found in New Brunswick, at $811 per month.


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