Consumers’ Path to Mortgage Delinquency

Laura Zhao, Jia Qi Xiao and Aidan Witts

No 2026-3, Staff Analytical Papers from Bank of Canada

Abstract: 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.

Keywords: Financial system; Financial system regulation and oversight; Household and business credit (search for similar items in EconPapers)
JEL-codes: D14 G21 G51 (search for similar items in EconPapers)
Date: 2026-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.34989/sap-2026-3 Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsap:26-3

Access Statistics for this paper

More papers in Staff Analytical Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().