Canadian homeowners who lean heavily on credit cards could be signalling trouble years before they miss a mortgage payment, according to new research from the Bank of Canada.Drawing on nine years of data from TransUnion Canada, central bank researchers say rising use of consumer credit can serve as a two-year “early warning signal” of impending mortgage delinquency.Blacklock's Reporter says the report argues that while borrowers typically prioritize mortgage payments over other debts, financial stress shows up elsewhere first — particularly on credit cards and lines of credit.Researchers found that roughly two years before missing a mortgage payment, households begin relying more heavily on consumer credit. One to two years before delinquency, missed payments on non-mortgage products start to climb. About six months before a mortgage default, both non-mortgage delinquencies and credit utilization rates accelerate sharply.With mortgage debt nationwide sitting at approximately $2.4 trillion, the bank said identifying early indicators of borrower stress is critical to financial stability and to understanding how monetary policy, housing demand and credit conditions interact.Separate federal data suggest many Canadians are already stretched. A 2025 survey by the Financial Consumer Agency of Canada found 31% of credit card users were carrying balances at interest rates of 19% or higher..The agency’s Canadian Financial Capability Survey reported that 60% of Canadians say they have trouble keeping up or sometimes struggle with bills. Financial strain was more pronounced among women, younger and middle-aged adults, those with lower education and income, indigenous people and individuals with disabilities.According to the survey, 34% of respondents said their monthly household spending exceeds their income, while 47% agreed they carry too much debt. Nearly half — 49% — reported using credit cards, overdraft protection or dipping into savings to cover daily expenses.Of those surveyed, 16% said they were unable to keep up with monthly bills. Another 42% said meeting expenses is sometimes a struggle. Thirty-nine% reported they were falling behind on bills.The findings were based on responses from 7,963 people nationwide. The agency paid $299,924 to Edmonton-based Advanis Inc. to conduct the polling.
