Canada’s Mortgage Renewal Wave: Strategy Amid Higher Rates and Rising Risk
Canada is facing a consequential mortgage renewal period. A Bank of Canada staff note (July 22) shows that roughly 60% of mortgages maturing in 2025–26 will bring higher payments—about a 10% average increase in 2025, and up to 15–20% for five-year fixed holders versus December 2024 rates. Concurrently, Ontario’s delinquency rate rose to 0.22% in Q1 2025 (Toronto 0.23%), its highest level since 2013—suggesting growing financial strain among borrowers ahead of the renewal wave.
Why This Renewal Season Matters
During the pandemic, many Canadians locked into ultra-low fixed rates. Now those terms are expiring, and with market offers nearing 5%, monthly payments are jumping. On a $400,000 mortgage, that could mean an extra $300–$400 per month—enough to strain household budgets and alter spending plans.
Homeowner Strategy Toolkit
- Proactive Outreach (120+ Days Before Renewal) – Early conversations unlock loyalty promos and pre-approval holds.
- Blended-Rate Bridges – Ease payment jumps by combining old and new rates.
- Amortization Adjustments – Extending amortization by one or two years can reduce monthly payments while keeping long-term goals intact.
- Variable Rate Options – For clients open to flexibility, variable products can offer immediate payment relief of ~5–7%.
What Brokers Should Do
- Use CRM alerts to prioritize clients facing high renewal impact.
- Share side-by-side payment scenarios comparing fixed, blended, and variable options.
- Promote value-adds such as cash-back features, prepayment privileges, and regular financial check-ins.
- Be attentive to regional trends such as Ontario’s rising delinquencies—especially in high-risk portfolios.
A Stable Yet Elevated Rate Environment
The Bank of Canada held its interest rate at 2.75% for the third straight decision on July 30, citing easing trade tensions but persistent inflationary pressure and resilient labour data. Rate cuts may emerge later this year, but for now elevated borrowing costs are set to persist—turning the renewal season into a planning opportunity rather than a moment for rate chasing.
Conclusion
Canada’s mortgage renewal wave is significant—but navigable. Homeowners who plan early, use blended solutions, consider amortization tweaks, and explore variable-rate options can reduce shocks. Brokers who lead with data, strategic scenarios, and compassionate guidance will elevate trust and deepen relationships. In today’s uncertain rate landscape, expert counsel is the most valuable asset you can offer.
