Source: Statistics Canada
Residential Mortgage arrears are low in Ontario. Arrears dropped to just 0.10% in 2021, less than half the national average of 0.22% in 2021 and 0.28% in 2020. Steady growth in employment in Ontario has contributed to very low delinquency rates. The Ontario unemployment rate was 8.0% in 2021.
Average Interest Rates of New Mortgages
Among all fixed-rate mortgage balances in the first half of 2021, only 14% have terms shorter than three years, compared to 17.5% in 2020 and 26.6% in 2019. New mortgage holders continued opting for longer-term mortgages to take advantage of historically low-interest rates. 55.3% of mortgage balances originated in 2021 (as of June) and 58.2% originated in 2020 and have terms of five years or more, compared to only 42.6% in 2019.
Bank of Canada Prime Rate
The economic slowdown caused by the Covid-19 Pandemic caused the Bank of Canada to drastically decrease its key overnight rate. By September 2022 with inflation on the rise in Canada and globally the Bank of Canada increased the rate to 2.75% in order to reduce and bring inflation in control.