Ottawa's arrears are forecast to fall. Toronto's climb 30%.

The wave arrived. Nobody counted the wreckage.

Every version of the mortgage renewal story you read in 2024 and 2025 was a forecast. About 60% of all outstanding Canadian mortgages come up for renewal across 2025 and 2026. The Bank of Canada's staff work put five-year fixed holders at a 15% to 20% payment increase, somewhere around $5,100 a year. CMHC counts more than 1.5 million households that have already signed at higher rates, with roughly another million still to come.

I ran the Ottawa version of that arithmetic in July, on an actual 2021 buyer holding an actual benchmark house. The payment went up $407 a month, 19.5%. That post was about what the renewal letter says.

This one is about what happened after people opened it.

Eight cities and one line going the wrong way

CMHC published a delinquency forecast in February, built on Equifax data, covering eight major Canadian markets from late 2025 through the end of 2026. It is the least-quoted useful table in Canadian housing.

Ottawa's arrears rate, meaning the share of mortgage holders 90 or more days behind, sat at 0.15% in the third quarter of 2025. CMHC's forecast puts it at 0.13% by the end of 2026.

Down. Not up.

Of the eight markets on that table, Ottawa's projected decline is the largest one. Montréal and Winnipeg also drift lower by smaller amounts, and Halifax finishes roughly flat. Calgary, Edmonton and Vancouver drift higher.

Toronto goes from 0.26% to 0.34%. That is a 30% increase across five quarters and the biggest move in either direction on the whole table.

Same country, same renewal wave, same rate path, two entirely different outcomes 400 kilometres apart.

0.13% only means something next to a baseline

A number that small is easy to wave off, so here is the context that makes it readable.

Ottawa's arrears rate in December 2019 was 0.21%. It bottomed at 0.07% in September 2022 when everybody was still carrying pandemic money. It peaked at 0.16% in March 2025.

So yes, Ottawa arrears more than doubled off the bottom. That is the version of the story that gets written. The version that doesn't get written is that even at the peak, Ottawa never got back to where it sat in 2019, and the forecast has it drifting further below that line through next year.

Toronto's December 2019 rate was 0.11%. Its end-of-2026 forecast is roughly three times that. Of the eight markets in the table, Toronto and Vancouver are the only two projected to finish 2026 above their own pre-pandemic level.

Nationally, 90-day arrears hit 0.24% in the fourth quarter of 2025, up from 0.21% a year earlier, and still under the 0.28% that was normal before 2020. The national number is real and it is rising. It is also being carried by two cities that are not this one.

What that does to the listings you are competing with

Ottawa's supply is running 44.5% above its long-run normal. That is a genuinely bad inventory number and I have not softened it once this summer.

But there are two very different ways a market produces that much supply. One is forced sellers. The other is optional ones. The arrears data says ours is overwhelmingly the second kind, and the distinction decides how you should behave.

Forced supply breaks on price. The seller has a deadline that is not negotiable, so the market clears fast and low. Optional supply does not break. It withdraws. Which is exactly the pattern Ottawa printed in July, when more listings quit the market than sold.

If you are a buyer sitting on your hands waiting for capitulation pricing, this table is the argument against you. The person across the table is not on a clock. Waiting for the market to hand you a discount has been a losing trade in Ottawa for three quarters and the delinquency forecast says it stays a losing trade through 2026. Negotiate against the specific weakness of the specific listing, its days on market, its price history, its condition. Do not negotiate against a distress that is not in the data.

Sellers do not get to enjoy this either

The same fact cuts both ways, and I would be selling you something if I only gave you the flattering half.

Your competition is not desperate. That is good news about your neighbours and bad news about your strategy, because it means you cannot outlast anybody. Nobody is going to blink and hand you the buyer. In a market with no forced sellers, the listings that transact are the ones that are priced and presented correctly, full stop. The fall calendar is not going to fix a price problem, and neither is patience.

The footnote under the chart

Here is the part I would want to know if somebody were quoting this table at me.

The methodology note under CMHC's forecast says it assumes the policy rate declines by the end of 2026.

The Bank of Canada has now held at 2.25% for six consecutive decisions. It announces again this Wednesday, September 2, and consensus is another hold. Headline inflation came in at 3.0% in July on a gasoline shock, even though the core measures and Ontario's own CPI are sitting near 2%.

So the reassuring Ottawa line is drawn on top of a cut that has not arrived. Treat it as conditional, because it is.

The number that would actually break it

CMHC is explicit that arrears historically track unemployment far more closely than they track interest rates. Income is what services a mortgage. A payment increase you can afford is an annoyance. A payment increase during a job loss is a listing.

Which is why the July labour numbers matter more to this forecast than anything the Bank does Wednesday. The Ottawa economic region posted the largest year-over-year employment decline of any economic region in Ontario, down 1.3%, about 10,700 jobs, with the labour force itself shrinking by 3,700.

That is the crack to watch. Not the renewal letter. The layoff notice.

One more piece of honesty about why arrears stayed low: CMHC found most renewing borrowers extended their amortization rather than absorb the higher payment. That works, and it costs. Low arrears partly reflect households buying breathing room with years of extra interest. That is resilience, but it is financed resilience, and it leaves thin reserves if the job market keeps sliding.

What I would do with this

If you are buying, price the seller across from you as someone with options, because the data says they have them. Find the weakness in the individual property instead. There is plenty of inventory to be selective in.

If you are selling, stop waiting for scarcity to rescue the price. It is not coming this year.

And if you are the one renewing, start shopping 120 days out and put a competing quote in front of your lender before you sign what they mailed you.

If you want to know which of those three you actually are right now, that is a fifteen minute phone call, not a form. Reach me at 613-262-6545 or fil@613realtor.ca and bring your real numbers.