Canadian Households Show Resilience Despite Rising Mortgage Arrears, CIBC Says

11:51 AM EDT, 10/26/2026 (MT Newswires) -- Canadian household credit quality remains more resilient than expected, despite rising mortgage delinquencies and a softening labor market, according to CIBC Capital Markets in a Monday note. Household debt growth has slowed to around 4%, approaching a record low when pandemic-related distortions are excluded, wrote CIBC. Mortgage debt grew by just 2% year-over-year in August, marking its weakest increase in 25 years. Insolvencies have climbed 6% over the past year but remain close to, rather than noticeably above, 2019 levels, said the bank. Meanwhile, early-stage delinquencies among subprime borrowers have eased modestly, average credit scores remain higher than before the pandemic, and delinquency rates on credit cards and lines of credit among mortgage holders have leveled off. Mortgage arrears are continuing to increase as borrowers face higher interest rates at renewal, but the pressure should gradually ease as the bulk of the rate-reset cycle passes by early 2027, added CIBC. Preventive measures by lenders and an expected stabilization or decline in unemployment should help keep household credit losses contained, despite further near-term increases in delinquencies, the bank said.