Market memo: Consumer credits trends – August 2025

  • First National Financial LP
The latest quarterly report from the credit monitoring firm Equifax suggests mortgage holders may be having an easier time coping with financial pressures than those who do not have a mortgage. 

Total consumer debt in Canada rose to $2.58 trillion in the second quarter of 2025, a 3.1% increase over the same period a year earlier.  The average, non-mortgage debt per consumer climbed to $22,500. 

Payment Performance 
Overall, 1.4 million Canadians missed a credit payment in the second quarter, of this year.  That is 7,000 fewer than in the first quarter, but it is 118,000 more than Q2 of 2024. 

Of those who missed a payment, 1 in 19 did not have a mortgage.  Those who did have a mortgage missed a payment at a rate of 1 in 37. In other words, non-mortgage holders missed a payment at nearly twice the rate of those with a mortgage. 

Financial Gaps Get Wider 
In 2019 the number of people, without a mortgage, who missed a credit payment was equal to about 45% of the mortgage holders who missed a payment.  In Q2 of 2025 that ratio reached 96%. 

“We continue to see a growing divide between mortgage and non-mortgage consumers — and continued financial strain among younger Canadians, who are facing a slower job market and rising costs,” said Equifax Canada Vice President Rebecca Oakes. 

Struggles for Gen Z & Millennials 
Consumers under the age of 36 appear to be facing the toughest financial stress. 

“The affordability crisis seems to be hitting younger consumers the hardest,” Oakes said. “Between rising costs, employment uncertainty, and limited access to affordable credit, many are struggling just to stay afloat.” 

Gen Zs and Millennials are carrying an average, non-mortgage debt that tops $14,000 and are reporting some of the highest delinquency levels for credit cards and car loans. 

Among the group, 2.35% had an outstanding balance that had gone past 90 days, in the second quarter.  That is not an astoundingly high number, but it is an increase of nearly 20% from Q2 2024. 

Mortgages 
The, so-called, “mortgage cliff” that homebuyers were supposedly facing – as they renewed at much higher rates than the rock-bottom, pandemic interest they were paying – turned out to be more like a “mortgage curb”, as one market watcher commented. 

Still, renewals are a heavy influence on the mortgage market and account for much of the 15.3% increase in new originations in Q2. 

Across the country, first-time buyers increased by 1.8%.  The amounts of their loans rose 4.0%, to an average of $430,000.  However, the biggest and busiest markets, Alberta, B.C. and Ontario, all saw declines in first time buyers. 

Financial Pressures Remain 
Generally, Equifax sees “early signs of stabilization in consumer credit performance”, but Rebecca Oakes acknowledges challenges remain. 

“Delinquency rates may be plateauing, but we’re not out of the woods yet.  High vehicle costs, food inflation, and regional economic pressures — especially in Ontario and Alberta — continue to weigh on Canadian households. As younger consumers struggle with job market challenges and rising debt, we expect credit performance to remain a key issue for younger consumers well into the second half of the year,” Oakes concluded.

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