Mortgage Arrears in Canada and Quebec: A Lagging Indicator

The mortgage arrears rate regularly makes the news, sometimes read as a warning sign for the housing market. It is a useful indicator, but it has one feature people forget: it arrives late. It confirms financial strain that households are already living with; it does not announce it. This article explains what it measures, its latest values in Quebec and Canada, and why it follows unemployment with a lag. For an indicator that, by contrast, speaks early, see our article on the sales-to-new-listings ratio.

What the CBA arrears rate measures

The Canadian Bankers Association (CBA) publishes the number of residential mortgages in arrears every month, in a table titled "Number of Residential Mortgages in Arrears". A mortgage is counted as in arrears when its payments are three or more months overdue.

The data cover the loans of nine banks named in the table: BMO, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank and TD Canada Trust, plus Manulife Bank, Laurentian Bank and Equitable Bank, added at different dates. According to CMHC's Spring 2026 Residential Mortgage Industry Report, chartered banks held about 79.5% of the mortgage market in the third quarter of 2025. The CBA rate therefore describes most mortgages, but not loans from credit unions, alternative lenders or private lenders.

The latest values: Quebec 0.19%, Canada 0.29%

For the month ended July 31, 2026, the CBA table, updated September 25, 2026, shows:

• Quebec: 1,728 mortgages in arrears out of 932,926, or 0.19%.
• Canada: 14,270 mortgages in arrears out of 4,911,806, or 0.29%.

Before 2026, you have to go back to August 2016 to find a Canadian rate of 0.29% or more in the CBA series. The rate started from a low of 0.14% in June 2022 and stood at 0.23% in July 2025. In Quebec, the June 2022 low was 0.10%, and the July 2025 rate 0.18%.

The increase is real and slow. It also remains small in absolute terms: more than 99 mortgages out of 100 are not three months in arrears, in Quebec as in Canada.

Three reasons the indicator arrives late

The first is its definition. A loan is only counted after three months overdue. Between the first missed payment and its appearance in the statistic, at least a quarter goes by.

The second is the order of payments. According to the same CMHC report, borrowers choose to miss payments on other credit products before risking losing their home. Credit cards, car loans and lines of credit show the strain before the mortgage does.

The third is savings. A household that loses income draws on its reserves first. The mortgage keeps being paid while they last, and the delinquency only shows up afterwards.

What CMHC observes about the link with unemployment

CMHC's Residential Mortgage Industry Report, Spring 2026 edition, published May 12, 2026, puts it this way: when households lose their jobs, many struggle to keep up with mortgage payments, and arrears then tend to rise, albeit with a lag. The report also notes that arrears measured by the CBA tend to match the unemployment rate, outside the spike during the pandemic.

To read a given month's arrears, you therefore have to look at the job market several months earlier. A rise in unemployment today will show up in arrears later; a rise in arrears today reflects income losses that have already happened.

Reading Quebec on its own

Quebec and Canada are not on the same path. In July 2019, before the pandemic, the rate was 0.26% in Quebec and 0.23% in Canada. In July 2026, Canada has moved past that level, at 0.29%, while Quebec remains below it, at 0.19%.

A national rate therefore does not describe the situation in Quebec. For a homeowner or buyer in Quebec, the Quebec line of the CBA table is the one to read, and even it says nothing about a particular region or neighbourhood.

What homeowners and buyers can take from it

A rising arrears rate does not, on its own, predict falling prices or a wave of forced sales: it records difficulties already present, at a level that remains low. To anticipate the market, listing and sales indicators speak earlier.

At the household level, the lesson is the opposite of the statistic's: trouble is best dealt with before the three-month mark. A homeowner who sees an income loss coming has more options by talking to their lender early than by waiting until their loan enters the CBA count.