Ontario Mortgage Renewals: What to Expect in 2025

Last week, we shared insights on mortgage rate trends, and many of you asked for more details. Here’s an in-depth look at mortgage renewals, their impact on the market, and what you should know if your renewal is coming up.

Mortgage Renewals and Market Impact

1. Mortgage Loan Growth Accelerates: Mortgage loan growth is rising as more homeowners renew or refinance, driven by hopes of lower interest rates. For those facing higher payments, refinancing can help reduce monthly costs or consolidate debts. Homeowners with significant equity may find refinancing an opportunity to access funds for renovations or investments.

2. 60% of Mortgages Renewing, Payments Rising: According to CTV News, over 60% of Canadian mortgages will renew between 2025 and 2026, with many homeowners facing up to a 40% increase in monthly payments. This is due to rate hikes since their last renewal, which could add hundreds or even thousands to monthly costs. Planning ahead is crucial to avoid payment shock.

3. Variable-Rate Mortgages Surge: More borrowers are choosing variable-rate mortgages, anticipating further rate cuts. Although variable rates carry some risk if rates rise, they can offer savings if the expected rate cuts materialize.

Impact of Mortgage Rates on Sellers and Buyers

Sellers’ Market Shifts: Higher mortgage costs are pricing some buyers out of the market, softening demand. However, if rates fall as expected, more buyers could re-enter the market, increasing competition. Sellers may benefit from listing before rates drop.

Affordability Challenges: Higher interest rates reduce buyer purchasing power, limiting offers and creating longer selling times. Buyers may shift towards smaller homes or different locations to stay within budget.

Tariff Risks and Economic Pressures: Tariffs on construction materials could increase home prices, particularly in new builds. Sellers of existing homes may find their properties more appealing as affordable alternatives.

Is Now the Best Time to Buy or Sell?

• For Sellers: Inventory is low, creating opportunities for motivated sellers to attract serious buyers before rate cuts increase competition.

• For Buyers: Purchasing before rate cuts could help buyers negotiate better deals while demand remains moderate.

Quick Tips for Renewing a Mortgage in Ontario:

• Start Early: Review your options 4-6 months before your renewal date.

• Compare Rates: Rates can vary widely between lenders—shop around.

• Consider Refinancing: Explore options to lower your rate or consolidate debt.

• Seek Expert Advice: A mortgage broker can help you navigate your choices and find the best rate.

Access Great Rates Through Our Trusted Partners

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Planning ahead and staying informed can help you navigate your renewal with confidence. Reach out today for personalized advice on your next move.