Here’s your Mortgage Minute for February 13th, 2026. Three developments affecting homeowners and buyers in the Greater Toronto Area right now.
The Mortgage Cliff That Became a Hill
Let’s start with some genuinely good news.
TD Economics just released data showing that Canada’s feared mortgage renewal crisis isn’t materializing the way many analysts predicted.
Why not?
Income growth over the last three years has been stronger than expected, running about two percent faster than pre-pandemic averages.
As a result, debt service ratios across the economy are actually below their 2023 highs, suggesting the period of worst risk has already passed.
The average mortgage amortization now sits about 16 months longer than before the pandemic, which has helped smooth payment shock at renewal. But TD’s analysis points out that extended amortizations weren’t the dominant factor. The more important driver has been stronger growth in personal disposable income.
What this means for you:
If you’re renewing in 2026, the situation is better than the headlines suggested.
But that doesn’t mean you should just auto-renew at the lower rate and call it a day.
If you locked in a high fixed rate in 2022 or 2023, you’re moving into a lower rate environment now, which will improve your monthly payment.
However, if you’re also carrying high-interest consumer debt on credit cards or lines of credit, this is a prime window to consolidate that debt into your mortgage and significantly improve your monthly cashflow.
Don’t leave money on the table by auto-renewing without a strategic review.
Your Car Payment is Killing Your Mortgage Qualification
Now here’s what is creating problems for Toronto buyers: auto debt.
Monthly car payments of $900 to $1,000 are now common across Canada, and most car loans now stretch to seven years rather than the five years most borrowers expect.
According to recent industry data, more than 80 percent of Canadians expect to pay less than $750 per month for a car payment, but AutoTrader predicts those payments could climb above $1,000 if new car prices rise due to trade uncertainty.
Here’s why this matters for your mortgage:
Every dollar you pay toward your car directly reduces how much mortgage you qualify for.
Lenders calculate your total debt service ratio, which includes all your monthly debt obligations: mortgage, property taxes, heating, credit cards, lines of credit, and car payments.
Most lenders prefer a TDS ratio in the low-40% range. When a borrower arrives with a $900-$1,000 car payment, that line item immediately eats into the room available for a mortgage.
A household earning $120,000 might fit comfortably under a 44% TDS cap with a moderate vehicle payment. Add a second high car payment or expensive insurance premiums, and the same family could be pushed over qualification thresholds, forcing them to accept a lower mortgage amount or face a decline.
What this means for you:
If you’re planning to buy in 2026, your vehicle is likely your biggest obstacle to maximizing your borrowing capacity.
Before you shop for a home, take a hard look at your car debt.
If you’re carrying a $900 car payment, that’s consuming $900 of your monthly borrowing capacity that could otherwise go toward your mortgage.
Even worse, many buyers underestimate how long they’ll be in car debt. Data shows 81% of borrowers expect loans of five years or less, but most loans actually stretch to seven years. That means high payments will follow you well into future mortgage renewal cycles.
Toronto Condo Owners – Time for a Reality Check
Third, if you own a condo as an investment in Toronto, you need to review your position.
Condo prices in Toronto are down 20 percent from their 2022 peak, and many investors are now facing negative cashflow situations due to a combination of factors:
- Higher carrying costs: property taxes, condo fees, and insurance have all increased significantly
- Longer leasing times and increased competition in the rental market
- Higher mortgage rates for those who bought or refinanced at peak prices
As a result, mortgage arrears in Toronto have quadrupled since 2022.
It’s important to note that overall delinquency rates remain low by historical standards. The stress test, strong household balance sheets, and lenders working proactively with borrowers have prevented this from becoming a crisis.
However, according to CMHC’s deputy chief economist Tania Bourassa-Ochoa, Toronto is the clear national outlier for delinquency risk due to high household debt, a slowing housing market, and a weaker jobs outlook.
The investor story is particularly important because of the high concentration of ownership in the condo segment. Many “mom-and-pop” investors are feeling the pressure.
What this means for you:
If you’re underwater on a condo or facing negative cashflow, don’t wait until renewal to assess your options.
Lenders are motivated to work with you. Foreclosure is costly and time-consuming, which means they’d rather find solutions that keep you in your property: extending amortizations, refinancing to consolidate debt, or restructuring terms to improve monthly cashflow.
However, your options narrow quickly if you wait too long.
If you’re thinking of selling, you need to factor in current market liquidity. Market conditions are weak right now, and it could take something like 15 years for current demand to absorb pre-construction condo inventory at the current pace.
The earlier you engage, the more choices you’ll have.
The Bottom Line
The Toronto mortgage market is in a period of stability, not crisis.
Renewals are more manageable than predicted. Rates are stable. Inventory is up.
But new challenges have emerged:
Auto debt is limiting qualification capacity for buyers. Toronto condo investors are facing cashflow pressure. And trade uncertainty is keeping both businesses and households cautious about major financial decisions.
Whether you’re renewing, buying, or managing an investment property, your strategy matters more than timing right now.
Want to discuss your specific situation?
Call or text me at 249-480-1249. Let’s review your numbers and build a strategy that works for your situation in 2026.
Simon Browning
Mortgage Agent Level 2
BRX Mortgage 13463
📞 249-480-1249
📩 Simon@humberbaymortgages.ca
🌐 humberbaymortgages.ca
Want to discuss your specific situation?
Book a call, let’s review your numbers and build a strategy that works for your situation in 2026.