Article Summary
RBC’s Q2 2025 earnings report reveals rising mortgage delinquencies, particularly in the Greater Toronto Area (GTA), where 90-day past-due rates hit 0.39%. The bank attributes this trend to payment shocks from higher interest rates, though overall borrower quality remains strong. RBC also flagged potential risks in the condo and commercial real estate sectors, while emphasizing disciplined underwriting. The bank’s mortgage portfolio grew to $412B, with 80% uninsured and an average LTV of 68%.
What This Means for You
- GTA homeowners: If you’re in a high-rate variable mortgage or facing renewal, proactively contact your lender to discuss payment relief options before delinquency risks escalate.
- Investors: Monitor RBC’s rising provisions for credit losses ($1.4B in Q2) as a leading indicator for other Canadian banks’ mortgage portfolios.
- First-time buyers: Leverage RBC’s data showing 60% of mortgages have
- Warning: The 33% variable-rate share in RBC’s portfolio signals ongoing payment shock exposure if BoC holds rates higher for longer.
RBC sees rising mortgage delinquencies, with GTA leading the way
People Also Ask About
- How do RBC’s delinquency rates compare to other Big Six banks? RBC’s 0.30% 90-day delinquency rate remains below industry averages but shows the fastest quarterly growth.
- What happens when a mortgage reaches 90 days delinquent? Lenders typically initiate power of sale proceedings after 15-30 days of failed workout negotiations.
- Does RBC offer payment deferrals for stressed borrowers? Yes, but Chief Risk Officer Hepworth noted these are case-by-case and require proof of income sustainability.
- Why is GTA outperforming Vancouver in delinquencies? Toronto’s higher proportion of investor-owned condos and shorter average amortizations (18 yrs vs Vancouver’s 22) create cash flow pressure.
Expert Opinion
“RBC’s data confirms our predictive models showing payment shock isn’t evenly distributed—it’s hyper-localized in markets with high investor activity and short amortizations,” notes mortgage strategist Sarah Davis. “The 7% of loans above 80% LTV bear watching, as these borrowers have minimal equity buffers if forced to sell in a softening market.”
Key Terms
- Mortgage delinquency rate trends Canada 2025
- GTA housing market payment shock analysis
- RBC mortgage portfolio risk assessment
- Canadian bank impaired loan provisions
- High-ratio mortgage default risks
- Condo developer loan exposure banks
- Variable rate mortgage renewal strategies
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