Mortgage Renewals in Canada 2025: How Homeowners Can Navigate Rising Rates
If you’re a homeowner in Canada, 2025 is a crucial year for your mortgage renewal. The numbers don’t lie: mortgage interest rates are now double what they were back in 2020, and that’s a big change you need to prepare for. Here’s what homeowners need to know—and why you can’t afford to wait until the last minute to renew.
The Rate Hike: What’s Changed Since 2020?
In 2020, Canadians enjoyed historically low mortgage rates. For the most popular 5-year fixed term, rates hovered between just 2.00%-2.40%. Fast forward to 2025, and the average 5-year fixed rate has jumped to around 4.40%—that’s double the interest rate of just five years ago.
This rate increase is hitting homeowners hard, especially since over 1.2 million fixed-rate mortgages are up for renewal in Canada this year. That represents a staggering $300 billion in mortgage loans—and many Canadians are struggling to adjust to the higher payments.
Why You Might Be Facing Higher Payments
For many homeowners, the bulk of their monthly mortgage payment has been going toward the interest, not the principal. This means that despite making payments for several years, the actual amount they owe on their mortgage hasn’t been significantly reduced. Now, when it’s time for renewal, many will face an unexpected shock: higher payments based on the new, doubled interest rates.
Add to this the fact that many Canadians are already feeling the squeeze from other rising costs—vehicle loans, lines of credit, personal loans, property taxes, insurance, and more. With all of these increases, it’s no wonder that homeowners are starting to feel the pressure.
The Problem: Procrastination
Too often, homeowners wait until the last minute to deal with their mortgage renewal. This delay can be a serious mistake, leading to stress, financial strain, and even missed opportunities. If you don’t plan ahead, you may find yourself scrambling to manage a significant increase in your mortgage payment—something that could have been avoided with just a little foresight.
What You Should Be Doing NOW
The key to managing your mortgage renewal in 2025 is planning ahead. Don’t wait until your renewal date is just around the corner. Here’s what you can do now to make sure you’re prepared:
- Start Talking to Your Mortgage Broker or Bank Early
The earlier you start the renewal process, the better. At least 6 months before your renewal is ideal, but if your financial situation has changed recently, it’s smart to start up to a year in advance. - Review Your Financial Situation
Take a close look at your current financial situation. How have your income, expenses, and debts changed over the last few years? If you’re carrying other high-interest debt (like personal loans or credit cards), it might make sense to consolidate them into your mortgage, especially if your mortgage rate is lower than the rates on your other loans. - Get Expert Advice
I recommend speaking with a mortgage broker, a financial advisor, or even an insolvency trustee if you’re concerned about your debt load. As a mortgage broker, I take a comprehensive look at my clients’ entire financial situation and work with them to find the best options for managing debt and preparing for the future.
Why Act Now? The Urgency Is Real
By taking action today, you can secure a better rate, consolidate debt, and avoid the stress of last-minute decision-making. Waiting too long can lead to missed opportunities or even worse—financial hardship down the line.
It’s time to take control of your mortgage renewal. Don’t let rising interest rates catch you off guard—let’s start planning now so you’re ready for 2025.
If you’re ready to discuss your mortgage renewal options, contact me today. Together, we’ll craft a strategy that works for you, so you can move forward with confidence and peace of mind.
