Impact of rising interest rates on mortgage renewals
Many homeowners are bracing for higher mortgage payments when it comes time to renew, as interest rates remain much higher than they were before the pandemic. This shift is expected to impact nearly a million mortgages up for renewal in 2025 — many of which were secured during the historically low rates of 2020.
Even though interest rates have started to come down slightly, many borrowers will still see a noticeable jump in their monthly payments. In the last quarter of 2024 alone, about one in four homeowners renewing their mortgage faced an increase of more than $150 per month. For some, these rising costs could put additional pressure on household budgets, making it even more important to plan ahead and explore options to manage the financial impact.
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Get StartedRecommendations for preparing for increased mortgage renewal costs
Are you preparing to renew your mortgage in this higher rate environment? You are not alone. While you can't print money to help you bridge the gap, here are some things you can do to prepare for increased mortgage renewal costs:
- Assess your financial situation early: Review your current income, expenses, and savings to understand how increased mortgage payments will impact your budget
- . Explore refinancing options: Contact your current lender or other financial institutions to discuss refinancing your mortgage at a more favourable rate or extending the amortization period to reduce monthly payments.
- Seek professional financial advice: Engage with a financial advisor or mortgage broker who can provide personalized strategies to manage increased payments and explore alternative solutions.
- Consider additional income sources: Look into part-time work, freelancing or renting out a portion of your property to generate extra income to offset higher mortgage costs.
For support and advice, homeowners can consult financial advisors, mortgage brokers, housing counseling agencies and their current lenders to explore available options and develop a plan tailored to their unique financial situation.
Sources
1. Nasdaq: Equifax Canada Reports Significant Rise in Mortgage Delinquencies in Ontario Amid Growing Consumer Debt (February 25, 2025)
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