Canada’s Credit Crunch: Peak Homebuyer Defaults & Renter Insolvencies Soar

The bill for Canada’s housing bubble is finally landing, and many can’t afford to pay it. TransUnion credit data shows consumer credit is expanding aggressively in Q2 2026. The growth isn’t due to confidence-inspired borrowing, but existing borrowers looking to offset their rising cost of living. The result is rising mortgage delinquencies for those who bought at peak, and a sharp uptick of insolvencies for renters. Canadian Consumer Debt Balances Driving Credit Growth, Not New Loans Total household debt is growing at a brisk rate, rising 4.6% over the past year to $2.64 trillion in Q2 2026. This trend is driven by existing borrower balances rising over the past year, not new lending. The issue is made more concerning by the concentration of growth at the extremes of the credit spectrum. Annual credit growth was flat for Prime (0%) borrowers, those with a credit score between 715 and 764. The growth rate was also roughly a quarter of the average rate for Prime Plus (+1.2%) and Near Prime (+1.7%) borrowers, whose credit covers slightly better and slightly worse credit quality. The uptick is almost entirely concentrated in Super Prime (+6.5%) borrowers with 800+ scores, and Subprime ...