Canada could see a wave of mortgage renewals in 2025. Here is how some homeowners plan to navigate the payment shock.
CTV
At least 1.2 million Canadians are facing a mortgage renewal in 2025, and 85 per cent of those existing home loans were contracted when the Bank of Canada’s interest rate was at or below one per cent. Here's how some homeowners are planning to navigate the increased payments.
“We have no idea how we will afford an increase.”
That’s what Alecia, a Horseshoe Valley, Ont. resident, said when asked about renegotiating her mortgage in 2025 and the expected rise in costs.
“It’s not just the mortgage, it’s the property tax and all other expenses that are of concern,” she told CTV News Toronto.
The 63-year-old property owner is one of 1.2 million Canadians facing a mortgage renewal in 2025, according to a report released by the Canadian Mortgage and Housing Corporation (CMHC).
At least 85 per cent of those existing home loans were contracted when the Bank of Canada’s interest rate was at or below one per cent, the report notes, which means more than one million homeowners will face “significantly higher interest rates” when they renew.
The payment shock for many Canadians will come even after the Bank of Canada cut interest rates by a total of 175 basis points since last spring. Interest rates had previously reached a 22-year high in an effort to curb inflation.
Alecia has a $1 million mortgage left on her primary residence and she admits that she’s unsure what type of rate she’s up against when she renews. She said she and her husband previously listed their property amid the rising costs of living in Canada and said they plan to move to Mexico.
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