Canadians took on more mortgage debt last year, with the total debt hovering close to $2 trillion in 2025, a report by Equifax Canada shows.
The country is in the middle of a mortgage renewal wave, with the Canada Mortgage and Housing Corporation estimating that at least 1.5 million households had already renewed their mortgage by the end of 2025 and a million more set to do so in 2026.
Mortgage renewals continued to dominate the mortgage market in the fourth quarter, with total mortgage debt reaching $1.95 trillion, the report by Equifax Canada found.
This is an increase of 2.6 per cent compared to the same time last year.
“Interest rate stabilization is appearing to have a positive impact on homeowners and the Canadian mortgage industry, however in hotter housing markets, affordability remains a concern,” said Rebecca Oakes, vice-president of advanced analytics at Equifax Canada.
“High mortgage balance remained a significant barrier to entry, with average new loan amounts climbing 4.1 per cent to $363,778. This burden was even heavier on first-time homebuyers, who saw their average new loan size grow 5 per cent to reach $441,301,” the report said.
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Many households experienced “payment shock,” or a sudden increase in their monthly mortgage payments due to renewal. This prompted many to switch lenders, the report added.
“We continue to see rising missed payments on higher value mortgages in Ontario as post renewal payment levels prove too high for some consumers,” Oakes added.
Starter homes getting costlier
In addition to higher mortgage costs, new homebuyers are also struggling with the cost of buying starter homes in today’s housing market, a recent report by the University of Ottawa’s Missing Middle Initiative showed.
While incomes in Canada have risen 76 per cent since 2004, the price of a new home at the lower end of the market has risen by 265 per cent, the analysis said.
“Brand-new family-sized starter homes are over twice as expensive relative to income as they were 20 years ago. And unless governments get serious about bringing down the cost of homebuilding, it will take another 20 years to fix,” economist Mike Moffat said in the report.
The report added that even if home prices stopped rising entirely, it would take 25 years for the price-to-income ratio to reach the levels they were at in 2004.
Moffat said the government needs to not only work to reduce the cost of homebuilding, but also have “grown-up conversations” about radically altering Canada’s zoning laws to allow for more infill development.
“We need to examine the building code to identify areas where homes are unnecessarily expensive and to open up new housing types, as the starter home of 2034 may have to be different from that of 2004,” he said.
© 2026 Global News, a division of Corus Entertainment Inc.
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