Canadian households remain the most indebted in the G7, yet the latest data suggest the picture is more nuanced than a single ratio can capture. Statistics Canada figures cited by Ratehub.ca show household debt relative to income fell to 176.4% in the second quarter of 2026, down from 178.6% in the first quarter — a modest improvement, but one that still leaves Canada at the top of the G7 for household leverage, according to analysis from the Macdonald-Laurier Institute.
The context for that figure matters. The Bank of Canada‘s policy rate has held at 2.25%, after being cut from 3.00% in January through the course of 2025, according to federal insolvency data from the Office of the Superintendent of Bankruptcy (OSB). The household debt service ratio — the share of income going toward debt payments — eased slightly over the same period, from 14.7% to 14.6%, suggesting some relief even as overall debt levels stay elevated.
Mortgage Delinquencies Creeping Up, Unevenly
Writing in the National Post, Murtaza Haider and Stephen Moranis note that Canada’s mortgage delinquency rate — the share of mortgages more than 90 days in arrears — stands at 0.28%, the second-lowest in the G7 and far below the 1.43% average delinquency rate in the United States. But that Canadian rate has doubled over the past four years, a trend the authors call “uncomfortable” despite the relatively strong headline comparison.
Of Canada’s nearly five million outstanding residential mortgages as of June 2026, only 14,021 were past due by three months or more. Regulators credit the Office of the Superintendent of Financial Institutions’ mortgage stress test — first introduced in 2016 and expanded in 2018 — with keeping that number low even as roughly 1.8 million mortgages came up for renewal at sharply higher rates during 2025 and 2026, with more renewals expected in 2027.
The risk is not evenly distributed. Data from the Canadian Bankers Association shows Saskatchewan’s delinquency rate at 0.46%, more than double Quebec’s 0.18%. Despite that, Haider and Moranis note Saskatchewan’s smaller population means its overall exposure is limited, while Ontario — with the largest number of mortgages in absolute terms — is where delinquency rates have recently risen above pandemic-era levels, including in urban centres such as Toronto and Barrie, according to data from the Canada Mortgage and Housing Corporation and Equifax.
A C.D. Howe Institute paper cited in the same analysis points to two factors cushioning the broader debt market: financial strain is concentrated among younger workers and in expensive housing markets, and the debt-service ratio has improved since peaking in 2023.
Renewal Pressure Still Weighing on Households
For many borrowers who locked in low rates in 2020 and 2021, renewal has meant a real increase in monthly costs. CMHC’s 2026 Mortgage Consumer Survey found 35% of renewers reported increased financial pressure from interest rate changes, with payments rising by an average of $375 per month. Concern about affording payments has eased somewhat — 39% of mortgage holders told CMHC they were worried about making payments in 2026, down from 53% in 2025 — but Mortgage Professionals Canada’s 2026 State of the Housing Market Report found 44% of mortgage holders would struggle if their payments rose by even less than 15%.
Since November 2024, borrowers doing a straight switch to a new lender at renewal — without increasing their mortgage balance or amortization — have been exempt from the mortgage stress test, a change Ratehub.ca says removes one hurdle for homeowners seeking better rates, though lenders still apply their own credit and income checks.
Insolvencies Climb Even as Debt Service Eases
While mortgage metrics show pockets of strain, broader insolvency figures from the OSB point to continued pressure on household finances. A total of 145,297 insolvencies were filed under the Bankruptcy and Insolvency Act in 2025, up 1.3% from 2024 and above pre-pandemic 2019 levels. Consumer insolvencies rose from 137,295 in 2024 to 140,457 in 2025, while business insolvencies fell from 6,188 to 4,840 over the same period.
Canadian Household Debt and Insolvency Snapshot
The OSB data shows insolvency filings alongside a weaker labour market backdrop: Canada’s unemployment rate rose from 6.4% in 2024 to 6.8% in 2025, even as real GDP grew 1.7% and inflation, measured by the Consumer Price Index, slowed to 2.1% from 2.4% the prior year. Consumers aged 35 to 49 accounted for the largest share of insolvency filings, at 38.3% in 2025, up from 37.8% in 2024. Regionally, British Columbia saw the largest percentage increase in consumer insolvencies among major provinces, up 10.6%, while Saskatchewan posted the sharpest decline, down 9.7%.
A Wealth Picture That Complicates the Debt Story
Alongside rising debt loads, Canadian household net worth climbed to a record $18.6 trillion in early 2026, according to domestic data referenced in a Wealth Professional report on Allianz Research’s Global Wealth Report. Canada ranked seventh globally in net financial assets per capita in 2025, with a household debt-to-GDP ratio of 103.3%, trailing the United States, Switzerland, Denmark, Singapore, Taiwan and Sweden. Allianz Research’s Ludovic Subran noted that globally, asset values rather than new savings are increasingly driving wealth gains — a dynamic that means rising net worth figures can mask uneven debt burdens across income groups and regions.
Taken together, the data point to a household debt landscape that is neither uniformly worsening nor broadly improving: aggregate ratios have ticked down and overall mortgage delinquencies remain low by international standards, but insolvencies continue to climb and specific regions and age groups — notably younger, heavily indebted borrowers in Ontario’s urban centres — face more acute pressure than national averages suggest.
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