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Canada

Delinquency rates increasing, credit scores still high on Prairies: report

The latest Canada Mortgage and Housing Corporation (CMHC) reports show mortgage delinquencies are high and rising in the Prairies — and the Queen City region showed the highest rates of all.

The report on mortgages and consumer credit trends used data from the credit bureau Equifax to show Regina had a 0.65 per cent delinquency rate through the first quarter of 2019. That’s compared to 0.58 per cent in Saskatoon, 0.56 per cent in Edmonton, 0.35 per cent in Calgary and 0.29 per cent in Winnipeg.

Save for Calgary, all of the regions selected in the report showed rates that matched or exceeded five year highs.

READ MORE: Regina employment up, construction down in latest economic report card

The report touts downward pressure in house prices and higher mortgage rates as the main culprits behind the trends in Saskatchewan. Canada Mortgage and Housing Corporation Economic Analyst Christian Arkilley said the root cause behind it all is the downturn in the oil and gas industry.

“If there’s a shift from oil and gas to other industries, they may not earn as much as they used to in oil and gas, and that may add some shock to their income,” he said.

The report also shows fluctuations in mortgage delinquency rates tied to loan amounts. For loans of less than $100,000, delinquency rates in Regina are 0.79 per cent.

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The slight increase in mortgage delinquencies, though, isn’t enough to sound economic alarm bells. The report shows personal credit scores on the prairies remain high.

Scores average from 759 to 765 — numbers considered “excellent”.

In fact, the report notes that, on average, those with mortgages had lower overall delinquency rates on their loans.

“That’s probably because individuals with mortgages may have stable jobs with regular income to maintain the cost of living,” said Arkilley, “while individuals without mortgages may part-time jobs or irregular income, making it difficult to maintain the cost of living.”

The CMHC report defines mortgages in delinquency as those for which the borrower is more than 90 days late on payments.

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