The mortgage renewal wave that has weighed on Canadian homeowners for the past three years is finally starting to ease — but not everywhere equally. According to Canada Mortgage and Housing Corporation’s latest Residential Mortgage Industry Report, Toronto mortgage arrears climbed 45% year-over-year in the fourth quarter of 2025, one of the sharpest increases in the country, even as national mortgage stress showed signs of stabilizing.

For GTA homeowners and buyers trying to make sense of what’s actually happening in this market, the CMHC report is one of the clearest snapshots available. Here’s what it found, and what it means if you’re renewing, buying, or just trying to keep your mortgage on track in Toronto, Mississauga, or Brampton this year.

What CMHC’s 2026 Report Found

CMHC’s report pulls together data through the end of 2025 and into early 2026, and the headline story is a market in transition. Residential mortgage debt in Canada surpassed $2.4 trillion in January 2026, up 4.8% from a year earlier. Average rates on outstanding mortgages declined from roughly 4.8% in January 2025 to about 4.2% in January 2026, which has taken some of the sting out of renewals for many borrowers.

But averages hide a lot of local variation, and Toronto is where CMHC flagged the most concern.

Toronto Arrears Climb 45% Year-Over-Year

Nationally, the 90+ day mortgage delinquency rate rose to 0.24% in Q4 2025, up from 0.21% a year earlier — still low by historical standards. Ontario’s overall delinquency rate, however, rose 35% over the same period, and Toronto posted one of the largest increases of any market in the country at 45%.

“At the national level, mortgage arrears remain low by historical standards and the mortgage system overall is stable, but pockets of significant stress still exist beneath the surface, particularly in areas like Toronto and Vancouver where arrears have grown the most,” said Aled ab Iorwerth, CMHC’s deputy chief economist, in the report.

That’s a meaningful signal for anyone in the GTA. Even as the broader renewal wave crests, a segment of local homeowners — often those who bought or renewed at peak rates during 2022 and 2023 — are still absorbing payment shock in a slower local resale market.

Why Borrowers Are Shifting to Variable Rates

One of the more striking shifts in the report is how borrowers are choosing their mortgage terms. By February 2026, variable-rate mortgages accounted for 42% of extended mortgages at chartered banks, making them the most popular choice, while only 11% of borrowers opted for a traditional 5-year fixed term.

CMHC attributes this to variable rates dipping below fixed rates in late 2025 for the first time since 2022, combined with ongoing uncertainty about where rates go next. Borrowers, understandably, don’t want to lock in for five years if they think better pricing might be around the corner — but that same uncertainty is exactly why this decision shouldn’t be made without running the numbers with a broker first.

Renewal Pressures Are Easing — But Not Evenly

CMHC believes the renewal wave likely peaked in 2025, with the number of borrowers renewing in 2026 expected to be 13% lower than in 2025. That’s genuinely good news, and it should mean less concentrated pressure on the market overall this year.

The report also points to a policy change that’s quietly reshaping renewal behaviour: OSFI’s decision in late 2024 to remove the stress test requirement for uninsured borrowers switching lenders at renewal. Since then, uninsured mortgage switching has jumped 34%, as homeowners shop their renewal to a new lender for a better rate instead of defaulting to their current bank’s offer.

First-Time Buyers Are Getting a Boost from Insured Lending Changes

For first-time buyers, the report highlights a real shift in affordability tools. In Q4 2025, 54% of mortgages extended to first-time buyers by chartered banks were insured, up from the typical mid-40% range before recent federal rule changes.

Those changes, rolled out through late 2024, expanded 30-year insured amortizations (up from the previous 25-year cap) to all first-time buyers and to anyone purchasing a newly built home, and raised the maximum home price eligible for mortgage insurance from $1 million to $1.5 million — a threshold that matters a lot in GTA markets where detached homes routinely exceed $1 million.

What Rising Toronto Mortgage Arrears Mean for GTA Homebuyers and Homeowners

If you’re renewing: Don’t assume your current lender’s renewal offer is your best option. With the stress test no longer applying to uninsured switches, shopping your mortgage has never been easier — and with 50+ lenders to compare, I can usually find a sharper rate than what shows up on a renewal letter.

If you’re buying: The expanded insured lending rules mean more first-time buyers in Toronto, Mississauga, and Brampton can qualify with a longer amortization and smaller down payment than a couple of years ago, even at today’s higher price points.

If you’re feeling the squeeze: If you renewed into a higher rate in the last two years and you’re in the group CMHC is describing as under pressure, don’t wait until you’re behind. Refinancing, restructuring, or even a short-term private solution can be far cheaper than a missed payment showing up as an arrear.

Kevin’s Take

I’ve been arranging mortgages in the GTA for more than 12 years, and this report matches exactly what I’m seeing on the ground: a market that looks calm in the aggregate but has real pockets of stress in Toronto specifically. The borrowers who come out ahead right now are the ones who treat their renewal or purchase as a shopping decision, not a formality. With access to more than 50 lenders across Ontario, Alberta, British Columbia, and Saskatchewan, I spend my time finding the option that fits your actual situation — not just the one your current bank happens to offer.

If you’re renewing this year, buying your first home, or worried about keeping up with payments, let’s look at your numbers before you commit to anything.

Contact KSD Mortgages for a free consultation at 647-802-3738 or application@ksdmortgages.com.

Source: Canada Mortgage and Housing Corporation, Residential Mortgage Industry Report, as reported by Canadian Mortgage Trends.