Mortgage and Consumer Credit Trends: Q4 2021 Data

April 9, 2021

Our latest release of Mortgage and Consumer Credit Trends data tables cover the fourth quarter of 2020. Here are some key highlights from the data:

Delinquency rates edged lower across all credit types

Mortgage delinquency rates in Canada edged lower to 0.25%. This is the lowest level in the five years that CMHC has reported mortgage delinquency rates. Rates in the major CMAs were below the national average and have fallen to:

0.10% in Toronto
0.14% in Vancouver
0.20% in Montréal

Delinquency rates trended lower across all non-mortgage credit types compared to Q4 2019 to:

1.18% for credit cards (down by 44 basis points)
1.70% for car loans (down by 29 basis points)
0.55% for lines of credit (LOC) (down by 9 basis points)
0.15% for home equity lines of credit (HELOCs) (down by 2 basis points)

Mortgage holders continue to have lower delinquency rates for all other major credit types compared to consumers without a mortgage. That said, the gap between the two groups shrunk.

Mortgage delinquency rates trended lower across all age cohorts:

The 25 to 34 year olds, who are typically first-time homebuyers, saw their rate decline to 0.20%, the lowest level of any cohort. This age group accounts for 15% of all mortgage holders.
Seniors aged 65 and over, who account for 12% of all mortgage holders, registered the highest delinquency rate of 0.33%.

Delinquency rates declined across all mortgage loan amounts. The highest delinquency rate, at 0.32%, remained for mortgages with the lowest value at origination that is less than $200,000.

Borrower credit scores trended higher

The share of outstanding and newly originated mortgages held by consumers with a high credit score (700 and above) continued to edge higher. For the outstanding mortgage loans, this share reached 87.71% which is the highest level in the last five years it has been reported by CMHC. For the newly originated mortgage loans this share edged up to 86.06%.

Compared to a year ago, 83.79% of mortgage holders and 83.56% of consumers without a mortgage either maintained or improved their credit scores. The average credit score increased to:

765 for mortgage holders
753 for non-mortgage holders

The average Bankruptcy Navigator Index is a ''predictive'' score that estimates the likelihood of a consumer to become insolvent in the next 24 months. Higher scores indicate a lower risk. The score for both mortgage holders (938) and non-mortgage holders (923) reached the highest level over the past five years. This suggests a lower probability of bankruptcies.

Non-mortgage outstanding balances declined

Total non-mortgage outstanding balances declined compared to Q4 2019. The most notable decline was for credit card outstanding balances:

14.17% for mortgage holders
13.76% for non-mortgage holders

This is followed by lines of credit outstanding balances, which decreased by:

10.72% for mortgage holders
10.14% for non-mortgage holders

Compared to the previous year, average monthly payment obligations declined for all non-mortgage loans with the exception of car loans. Monthly car loan payment obligations increased by:

1.5% for mortgage holders
1.3% for non-mortgage holders

Mortgages accounted for a larger share of consumer debt

Newly originated mortgages as a share of all mortgage loans edged up to 4.94% from 4.39% the year prior. New mortgage loans accounted for 6.93% of outstanding mortgage dollar balance compared to 5.73% in Q4 2019.

Mortgages with a higher loan amount ($400,000 and over) at time of origination as a share of all outstanding mortgages increased. In Q4 2020, these mortgage accounted for 41.42%, up from 37.98% the year prior.

Mortgage loans accounted for a higher share of total outstanding consumer credit balance, which increased to 68.91% from 66.85% a year ago.

Effects of the COVID-19 pandemic

The COVID-19 pandemic has had significant social and economic impacts in 2020 throughout Canada. We have observed unprecedented declines in employment, and increased financial stress for households. The pandemic poses a major risk to housing and financial markets. CMHC continues to monitor the economic impacts associated with the severity and duration of COVID-19.

Get the data tables