Examining the macro drivers of mortgage arrears in Canada

Thomas Michael Pugh, Tao Wang and Taylor Webley

No 2026-12, Staff Analytical Papers from Bank of Canada

Abstract: Mortgage debt represents over 70% of all Canadian household financial liabilities, and the performance of these debts is critical to the health of the financial system. We explore the relationships between mortgage arrears and key macroeconomic fundamentals such as labour market variables, interest rates, house prices and inflation. We then develop a framework to assess future household mortgage stress.

Keywords: Financial system; Financial stability and systemic risk; Household and business credit; Models and tools; Econometric, statistical and computational methods; Monetary policy; Real economy and forecasting (search for similar items in EconPapers)
JEL-codes: E37 G51 (search for similar items in EconPapers)
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsap:26-12

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