As of April 2025, mortgage arrears in Canada have begun to climb at a rate not seen since the early stages of the pandemic. According to a recent report from MPA Canada, mortgage delinquencies have reached their highest level in over four years, with economists warning that the trend could continue if economic stressors—like trade tensions and inflation—persist.
For homeowners in Abbotsford, Surrey, and surrounding areas in British Columbia, this data is more than a national headline. With high housing costs, increasing household debt, and a cost of living that continues to challenge families, local homeowners are at particular risk of falling behind on their mortgage payments.
This blog explores the causes behind the recent rise in mortgage arrears, how they may affect homeowners in the Fraser Valley and Lower Mainland, and most importantly, what proactive steps you can take to stay financially stable and avoid falling into delinquency.
What Are Mortgage Arrears and Why Are They Rising in 2025?
Mortgage arrears refer to missed mortgage payments that have gone unpaid for a significant period—typically 90 days or more. When a homeowner reaches this stage, the lender may begin foreclosure proceedings, putting the property at risk of being taken over and sold.
In early 2025, several economic factors have contributed to a nationwide rise in mortgage arrears:
- High household debt loads: Many Canadians stretched their budgets to purchase homes during the low-interest boom of 2020–2022. As rates began to rise in 2023 and 2024, renewal shocks hit harder.
- Renewals at higher rates: Though rates have begun to ease slightly following Bank of Canada cuts in early 2025, many homeowners renewing this year are still facing higher monthly payments than before.
- Stagnant wage growth: Incomes have not kept pace with inflation or housing costs, especially in expensive regions like the Lower Mainland.
- Economic uncertainty: Trade disputes and policy instability continue to affect business investment, employment security, and consumer confidence.
Local Impact: Mortgage Stress in Abbotsford and Surrey
In Abbotsford and Surrey, where average home prices are well above the national average, the risk of arrears is compounded by higher mortgage balances. Many families who bought at peak prices in 2021–2022 are now struggling to keep up with larger payments as their fixed-rate terms expire.
Key regional stress points:
- Abbotsford:
While more affordable than Metro Vancouver, Abbotsford has seen significant price growth in recent years. The average home price for detached properties remains around $1 million, and even townhomes now push beyond $700,000. Homeowners in newer developments, particularly those with smaller down payments, are feeling pressure as monthly costs increase. - Surrey:
As one of the fastest-growing cities in B.C., Surrey is home to a large number of first-time buyers and recent immigrants—many of whom bought during the pandemic real estate boom. Rising property taxes and utility costs, combined with upcoming mortgage renewals, are creating a precarious financial environment for many families.
In both cities, the shift in the economic environment has caught many off-guard. While falling rates in early 2025 provide some relief, the underlying debt load remains a challenge.
Early Warning Signs: When You’re at Risk of Arrears
Being proactive begins with recognizing the early signs of mortgage stress. Here are common indicators that a homeowner is at risk of falling into arrears:
- Struggling to make full monthly mortgage payments
- Using credit cards or lines of credit to cover household expenses
- Deferring other debt payments to prioritize the mortgage
- Receiving calls or notices from lenders about late payments
- Not renewing or reviewing your mortgage before the end of the term
- Ignoring financial correspondence or avoiding contact with your lender
If any of these apply, it’s essential to take immediate action rather than waiting until the lender initiates collection or legal action.
Practical Steps to Stay Ahead of Arrears in 2025
Homeowners in Abbotsford, Surrey, and surrounding areas can take several steps to avoid falling behind on their mortgage and protect their long-term financial health:
1. Start with a Mortgage Review
Before your mortgage comes up for renewal, or if you’re already struggling with payments, schedule a review with a mortgage advisor. A personalized assessment can identify opportunities for refinancing, switching to a lower-rate product, or adjusting the amortization period.
2. Consider Refinancing Options
Even with interest rates trending downward, many fixed-rate products are still available at lower-than-2023 levels. Refinancing may allow you to:
- Lower your monthly payment
- Consolidate high-interest debt
- Extend the amortization period
- Unlock equity to cover essential expenses
However, refinancing isn’t for everyone. Costs, penalties, and qualification criteria must be considered with the help of a qualified mortgage broker.
3. Restructure High-Interest Debt
If you’re juggling credit card balances or personal loans, consider consolidating them under your mortgage if there’s enough equity. While this increases the loan size, it often reduces the overall monthly payment burden, making it easier to manage cash flow.
4. Negotiate with Your Lender Early
Lenders often prefer to work with homeowners before accounts go into arrears. They may offer temporary payment deferrals, interest-only options, or other modifications to help avoid default.
5. Tap into Local Support Programs
Both Abbotsford and Surrey offer non-profit credit counselling and homeowner assistance programs that can help you create a household budget, negotiate with creditors, and develop a debt management plan.
Why Proactive Planning Matters More in 2025
With home prices stabilizing and inflation gradually cooling, many homeowners assume the worst is over. But the rise in arrears data tells a different story. It’s often the financial lag—the gap between economic change and household adjustment—that leads to defaults.
Proactive planning allows homeowners to:
- Avoid unnecessary penalties or legal fees
- Protect their credit score
- Maintain long-term homeownership
- Reduce emotional and financial stress
Local mortgage advisors, such as those serving Abbotsford, Surrey, and nearby areas, are equipped to offer tailored advice based on regional property values, lender guidelines, and income dynamics.
Navigating Renewals in a Post-Pandemic Economy
Many homeowners who locked in low mortgage rates in 2020–2021 are facing renewals in 2025 at much higher rates—even with the Bank of Canada beginning to lower its policy rate. This is known as the “payment shock” effect. In Abbotsford and Surrey, where average mortgage sizes are already high, even a modest rate increase at renewal can translate into hundreds of dollars more per month.
Strategies for Managing Payment Shock:
- Negotiate Terms Ahead of Renewal:
Don’t wait for your lender to send you a renewal offer. Start shopping for better rates 4–6 months before your term ends. A mortgage broker can help compare options from multiple lenders. - Blend and Extend:
If you’re mid-term and struggling, ask about a “blend and extend” option. It lets you roll your current mortgage into a new one with a longer amortization or adjusted rate without breaking the term entirely. - Switching Lenders:
If your current lender isn’t offering favorable terms, you may be able to switch to a new lender with better rates or conditions. Be mindful of transfer costs and requalification criteria. - Accelerated Payments Now to Ease Future Burden:
If your current payments are manageable, consider making extra payments before renewal. This reduces your principal and buffers against higher future payments.
Regional Case Comparison: Abbotsford vs. Surrey
Let’s look at how rising arrears risk might play out differently across two similar yet distinct Fraser Valley communities.
Abbotsford
- Average Home Price (2025): ~$960,000
- Typical Mortgage Amount: $720,000
- Profile: Many mid-income families in newer developments
- Key Risk: Lower wage growth relative to debt level
Homeowners in Abbotsford may benefit from slightly lower property taxes and home prices compared to Surrey, but wage constraints and less economic diversification may make cash flow management harder.
Surrey
- Average Home Price (2025): ~$1.15M
- Typical Mortgage Amount: $850,000
- Profile: Large population of first-time buyers and self-employed workers
- Key Risk: Property-related expenses and high living costs
Surrey’s growing population and transit expansion mean many residents bought with long-term appreciation in mind. However, short-term mortgage stress is building due to high carrying costs and renewal pressures.
In both cities, access to flexible mortgage products, professional advice, and budgeting tools can help homeowners navigate uncertain conditions.
FAQs: Mortgage Arrears, Renewals & Refinancing in 2025
Q1: What happens if I miss a mortgage payment?
Most lenders allow a brief grace period. After that, late fees may apply, and your credit score could be affected. After 90 days, the mortgage is considered in arrears, and foreclosure may be initiated.
Q2: Can I refinance if I’m behind on payments?
It depends on your lender and equity position. Some lenders may allow you to refinance to consolidate debt, but missed payments could limit your options or result in higher interest rates.
Q3: What’s the difference between deferral and forbearance?
A deferral is an agreed pause in payments; the interest continues to accrue. Forbearance is a broader arrangement that may include reduced payments or an extended term to help borrowers in distress.
Q4: How does refinancing help avoid arrears?
By extending your amortization or consolidating high-interest debt, refinancing can reduce your monthly payment. It improves cash flow and may help you stay current on obligations.
Q5: Should I switch from a variable to a fixed rate?
It depends on market forecasts and your tolerance for risk. In a volatile rate environment, locking in a lower fixed rate can offer predictability. However, if rates continue to fall, you might miss out on savings with variable options.
Q6: What should I do if I expect to miss a payment?
Contact your mortgage professional or lender immediately. Early communication often leads to more flexible solutions than waiting until payments are overdue.
Q7: Can I access my home equity if I’m struggling with payments?
If you have enough equity, you may be able to take out a second mortgage, HELOC, or refinance your primary mortgage to access funds. Keep in mind that qualification depends on income, credit score, and loan-to-value ratio.
Final Thoughts
Mortgage arrears are a growing concern across Canada, and homeowners in Abbotsford, Surrey, and nearby areas are not immune to the financial pressures driving this trend. However, with timely action, expert guidance, and a clear understanding of your options, it is possible to stay ahead of arrears and protect your long-term homeownership goals.
Whether you’re approaching renewal, struggling with rising payments, or simply unsure about your next move, planning ahead is your most valuable tool. Mortgage advisors who understand local market conditions can help you make informed decisions tailored to your financial situation and property goals.
If you’re feeling uncertain about your mortgage in 2025, now is the time to act—not after the missed payment notice arrives.