Posthaste: Homeowners up for renewal are in for a wake-up call
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Many Canadian homeowners are in for a round of sticker shock because more than half of them are nearing their mortgage renewal time.
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A whopping 60 per cent of outstanding mortgages are up for renewal in 2025 or 2026, according to the Bank of Canada's 2025 Financial Stability Report.
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'Most of these are five-year, fixed-rate mortgages that were secured during the pandemic, when interest rates were historically low,' Zoocasa Inc. said in a report. 'As a result, a large number of households will see their monthly payments increase, with some experiencing a significant rise.'
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Assuming a 10 per cent down payment and a 4.94 per cent fixed rate in 2020, homeowners in Vancouver and Toronto would face monthly payment increases of $132 and $117, respectively, according to real estate platform Zoocasa calculations.
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The report said people in every single one of Canada's 26 most populated regions would pay more per month if they had to renew their mortgage, though just five would pay more than $1,000 annually: Fraser Valley, B.C., ($2,496), Greater Vancouver ($1,584), Greater Toronto Area ($1,404), Victoria ($1,188) and Hamilton-Burlington ($1,020).
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'For regions like Fraser Valley, where affordability was already stretched, these changes represent a more dramatic shift in household budgets,' Zoocasa said. 'This highlights a crucial point for homebuyers: it's not just about the sticker price of the home. The long-term cost of borrowing can vary widely depending on where you live and how much room you have in your budget when the rates inevitably change.'
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There are, however, pockets where the increases amount to less than $1 per day.
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Mortgage holders in Saint John, N.B., and Trois-Rivières, Que., would see the lowest annual increases at an additional $300, while those in Saguenay, Que., ($324) and Newfoundland and Labrador ($336) would only witness moderate increases.
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On top of growing mortgage payments, Canadians are also facing more debt than ever before. Equifax Canada recently said 1.4 million Canadians missed a credit-card payment in the first quarter.
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