Consumers’ Path to Mortgage Delinquency

This paper examines the behavioural patterns of Canadian borrowers as they progress toward mortgage delinquency. Using the full universe of TransUnion borrower credit data from 2015 to 2024, we document that mortgage holders begin increasing their credit utilization roughly two years before their first mortgage delinquency. One to two years before becoming late on their mortgage, households frequently begin missing payments on various consumer credit products, particularly credit cards. This pattern accelerates markedly in the final six months leading up to mortgage delinquency. These empirical patterns provide a consistent and robust set of early warning signals that can be used to monitor emerging household financial stress.