If your mortgage renewal is approaching in 2025, you might be feeling uneasy about rising interest rates and their impact on your monthly payments. Many homeowners secured mortgages at historically low rates during the pandemic—now, as renewals take place in a different financial climate, borrowers must prepare for higher costs. But don’t worry, strategic planning can help you navigate these changes with confidence.
Why Are Mortgage Payments Increasing?
Interest rates were at record lows throughout the pandemic, making homeownership more affordable for many Canadians. Now, with rates significantly higher than before, renewing homeowners are seeing an increase in their monthly payments. The Bank of Canada estimates that 60% of mortgages will renew in 2025 and 2026, meaning a large number of borrowers will need to rethink their financial strategy.
How Higher Rates Affect Homeowners
A jump in mortgage payments can strain your budget, but there are proactive steps you can take to mitigate financial stress and secure manageable payment terms.
What You Can Do to Prepare
✅ Assess Your Financial Position: Review your income, expenses, and any discretionary spending to identify cost-cutting opportunities.
✅ Explore Refinancing Options: Extending your amortization period or refinancing to a more flexible mortgage can ease your monthly payment burden.
✅ Lock In Your Rate Early: If your renewal is nearing, consider locking in a favorable rate before further increases occur.
✅ Consult a Mortgage Expert: Speaking with a professional can help you uncover personalized solutions, from debt consolidation to mortgage restructuring.
Frequently Asked Questions
💡 How much will my monthly payments increase? The exact amount depends on your original mortgage rate, your new rate upon renewal, and your remaining balance. If you secured a mortgage at 2-3%, expect potential renewal rates between 4-6%, leading to a significant monthly payment increase.
💡 Should I switch from a variable-rate to a fixed-rate mortgage? This decision depends on your comfort level with risk. Fixed rates provide stability in uncertain economic times, while variable rates historically offer savings over the long term. Consulting a mortgage expert can help you weigh the pros and cons.
💡 Is refinancing worth considering? Refinancing may lower your payments or consolidate debt, but extending your mortgage term means paying more interest over time. Weigh the short-term benefits against the long-term costs with professional guidance.
Let’s Plan Your Renewal Together
Mortgage renewals don’t have to feel overwhelming. By reviewing your financial situation early, exploring refinancing possibilities, and seeking expert advice, you can ensure a smooth renewal process.
Ready to discuss your mortgage options? Reach out to us today to create a strategy that keeps your payments manageable while securing your financial future.
