Confidence
87%
Intelligence story
Canadian households enter a new phase of credit stress
Delinquencies are accelerating as savings buffers weaken and refinancing costs remain elevated.
Current state
72
High risk
Delinquencies are accelerating as savings buffers weaken and refinancing costs remain elevated.
Impact
High
Outlook
12M
Elevated through Q2 2027
Executive sequence
Credit deterioration accelerated
Delinquencies increased across several borrower segments.
Interest burden and weaker buffers
Higher payments, softer employment and savings depletion reinforced one another.
Loss and underwriting pressure
Review pricing, reserves, collections and segment limits.
Key drivers
| Driver | Direction | Contribution | Confidence |
|---|---|---|---|
| Interest burden | Upward pressure | 31% | 89% |
| Employment momentum | Upward pressure | 25% | 84% |
| Savings depletion | Upward pressure | 22% | 81% |
| Mortgage renewals | Upward pressure | 18% | 80% |
Forecasts
Canadian Consumer Spending Growth
Spending growth remains restrained by debt service and housing costs.
Canadian 90+ Day Delinquency Rate
Delinquency is expected to rise through mid-2027 before stabilizing.
Credit Card Balances (YOY)
Total credit card balances are expected to continue rising.
Auto Loan Delinquency Rate
Auto-loan delinquency forecast.
What to watch
90+ day delinquencies
Look for broadening deterioration.
Employment signals
Monitor layoffs, hours worked and vacancies.
Recommended actions
Refresh segment stress tests
Test near-prime and variable-payment borrowers.
Review collections readiness
Align capacity with downside scenarios.
Evidence
| Source | Type | Quality | Published |
|---|---|---|---|
| Bank of Canada | Official data | 96 | 2026-07-31 |
| Statistics Canada | Official data | 95 | 2026-08-01 |
| Atlas model output | Model output | 83 | 2026-08-04 |