Good Morning

Here’s your roadmap today:

1. The scale: How many mortgages are up for renewal

2. What research tells us about payment increases

3. Who’s most exposed (fixed vs variable, vintage years)

4. Regional differences: Toronto vs smaller markets

5. How to prepare and act

6. RealEdge bottom line

If you’d like a renewal impact brief customized to your property or market (Toronto, Durham, etc.)
👉 Book your strategy session today

Let’s get into it.

1. The scale: How many mortgages are renewing?

• About 60% of all outstanding mortgages in Canada are expected to renew in 2025 or 2026. This comes from the Bank of Canada’s newest loan-level dataset (RESL2) and regulatory filings. Bank of Canada

• That means a majority of Canadian households with mortgages will revisit terms—interest rate, amortization, conditions—within the next 18 months. Bank of Canada

• In absolute terms, in recent reports, ~1.2 million fixed-rate mortgages (valued over $300 billion) are projected for renewal in 2025 alone. Canada Mortgage and Housing Corporation

• According to Canadian Mortgage Trends (citing BoC), of those renewals, around 60% are expected to land at higher payments relative to December 2024. Mortgage Rates Canada

This renewal wave is large—and coinciding with elevated interest rates—meaning many will feel a “payment shock” even as rates drift lower from here.

2. What research says about payment increases

• In Bank of Canada’s Staff Analytical Note 2025-21, they simulate how payments shift relative to December 2024:

  • On average, homeowners renewing in 2025 may see a ~10% increase in their monthly payment compared to their December 2024 level. Bank of Canada

  • By 2026, average increases moderate to ~6% over that same baseline. Bank of Canada

  • But among 5-year fixed-rate holders, the increase can be 15–20% (or more) depending on how low their original rate was. Bank of Canada

  • Those with variable-rate/variable-payment mortgages may see their payments drop ~5–7%, because the variable rate adjusts downward. Bank of Canada

• A TD Economics commentary highlights that while this payment pressure is real, most borrowers will not face extreme stress, because:

  1. Many qualified under more conservative rates originally. economics.td.com

  2. Many renewers have reduced principal over time (so the balance is lower than origination). Bank of Canada

  3. Income growth over the term may help absorb increases. Bank of Canada

• Meanwhile, some market commentary notes that aggregate mortgage payments are trending lower overall thanks to rate cuts and resets—but that hides the fact that renewing cohorts still face upward pressure. Mortgage Rates Canada

3. Who is most exposed?

It’s this interplay of original rate, balance remaining, term, and income cushion that determines how steep the hike feels.

5. How to prepare / mitigate the risk

Here are strategies for homeowners, investors, and buyers to navigate the renewal wave:

For homeowners (fixed-rate holders):

• Know your renewal date — don’t wait. Start shopping 6–12 months in advance, not days before.

• Compare lenders & terms. Even a small rate difference or lower spread can substantially cut your payment.

• Shorter fixed terms or hybrid strategies. For instance, lock 3 years now and monitor rate cuts to decide later.

• Refinance options. If equity is strong, explore refinancing or restructuring (e.g., reduce amortization, longer period).

• Stress-test your budget. What if payment rises +15%? Can your current income absorb it? If not, plan backstops (cut discretionary, build cushion).

For property investors:

• Lock in good deals now. Acquire properties with built-in rental upside to offset renewal shock later.

• Prefer longer leases / annual adjustments to buffer payment increases.

• High-cushion underwriting. Use conservative rent growth, higher vacancy, and buffer clauses.

• Stay flexible. In markets where stress is acute, you may consider converting to short-term or alternative use.

For buyers:

• Build margin. Don’t max out to what you qualify for—allow space for payment increases.

• Choose assets with rent resilience. Family homes near transit/schools or in strong demand zones give more protection.

6. RealEdge bottom line

• Renewal risk is real—and large. ~60% of mortgages will renew by 2026, and most renewals this cycle will land with higher payments (10% on average, more for fixed-rate cohorts). Mortgage Rates Canada

• Toronto’s fixed-rate owners are under more pressure, especially those in condo or high-priced housing; smaller markets are more forgiving though not immune.

• Proactivity is your best defense. Start early, shop smart, stress-test aggressively, and avoid getting caught flat-footed.

If you’d like a renewal impact brief customized to your property or market (Toronto, Durham, etc.)
👉 Book your strategy session today

Stay ahead RealEdge is here to help you navigate the bumps, not fall into them.

The RealEdge Team

See you next week