Blindly signing your renewal can be costing you money!

🏡According to CMHC, in 2025 approximately 1.2 million fixed rate mortgages will come up for renewal in Canada. That accounts for roughly 300 billion dollars in mortgage debt. Most of these mortgages have not renewed since interested rates started rising in 2022 and the vast majority of them are at rates under 3%. It’s the first time those borrowers might start to feel a real financial impact.

🏡In 2020, a $325,000.00 mortgage had an average interest rate of about 2.54%. On a 25-year amortization that gave monthly mortgage payments of $1,465.00. Renewing into a higher interest rate could yield higher payments, despite the declining mortgage balance.

🏡In 2025, this mortgage would renew with a balance around $265,000.00 and an interest rate around 4.54%, giving monthly payments of $1,657.00. Despite paying off their mortgage for 5-years, borrowers would see an increase in their monthly mortgage payment by about $105.00.

📉Borrowers renewing in 2025 could see a less dramatic jump in rates compared to borrowers who renewed last year.

🧑‍💻When renewing at higher rates, it is probably going to help a fair bit to reach out to your mortgage broker and see if you are getting the best rate there is. According to a 2024 Mortgage Professionals Canada (MPC), 64% of borrowers used their same mortgage professional when refinancing and 74% of borrowers used their same lender.

❌Blindly re-signing on the dotted line could be leaving interest savings on the table!