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    LUMINAIRE - Illuminating the Age of Intelligence

    Mortgage Rate Shock and Arrears Timeline

    Housing stress is a lagging series because the legal sequence is slow. Enter a balance, an original rate and a reset rate to see the payment change, the share of income it consumes, and how long the path to a filing actually takes. Scenario model, not advice.

    Rate Shock and Arrears Timeline
    Scenario model, not live data
    Payment before reset$2,014 / mo
    Payment after reset$2,942 / mo
    Monthly increase$928 (46%)
    Debt service ratio before34.5%
    Debt service ratio after46.1%

    Distress threshold

    Above forty three per cent the household has little absorptive capacity left. Historically this is where serious delinquency rates begin to separate materially from the national average, with a lag of two to four quarters after the reset.

    If arrears begin, the sequence is fixed

    1. Month 1First missed payment. Late fee applied, no reporting yet.
    2. Month 2Delinquency reported to credit bureaus. Servicer outreach begins.
    3. Month 3Ninety day mark. The loan enters serious delinquency statistics.
    4. Month 4Loss mitigation window. Modification or forbearance decided here.
    5. Month 5 to 7Notice of default or acceleration where mitigation fails.
    6. Month 8 to 18Filing and sale, timing set by state or provincial process.

    Payments assume a twenty five year remaining amortisation and are calculated from the figures entered. Arrears bands describe historical relationships between debt service ratios and delinquency, not a prediction about any individual household. This is not financial advice.

    Read the accompanying analysis: Foreclosures, Resets and the 2026 Rate Path