Canada Mortgage Renewals 2025: 1.2M Borrowers Face Higher Payment

Toronto | October 4, 2025, 10:00 IST — Filed via Nesto.ca mortgage insights

Canadian homeowners are bracing for higher mortgage payments as roughly 1.2 million mortgages come up for renewal in 2025. Most of these loans were contracted during the ultra-low interest rate environment of 2020–2021, leaving borrowers exposed to what industry experts are calling “renewal shock.”

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Rising Payments Despite Rate Cuts

While the Bank of Canada cut its benchmark policy rate to 2.50% in September 2025, the relief may not be immediate for everyone.

• Fixed-rate borrowers who locked in at historically low levels will only feel the adjustment at renewal, when today’s higher contract rates come into play.
• Variable-rate borrowers, on the other hand, already see modest relief as lenders reduce prime-linked rates.

Analysts estimate fixed-rate holders could face 15–20% higher monthly payments compared to December 2024, while some variable holders might actually see their payments decline by 5–7%.

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A Wave of Renewals Ahead

Industry data suggest that nearly 60% of mortgage holders renewing between 2025 and 2026 will face higher costs.
This wave coincides with household debt at record highs and affordability at stretched levels, making refinancing strategies critical for many families.

“Homeowners who signed five-year fixed mortgages in 2020 will now be facing a completely different rate landscape,” Nesto.ca noted in its latest update.

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Strategies for Borrowers

Experts advise Canadians to:

• Shop around at renewal rather than automatically accepting their bank’s offer.
• Consider shorter-term fixed products if they expect further Bank of Canada cuts.
• Evaluate variable options to capture near-term rate relief.

Mortgage brokers also stress the importance of assessing total debt obligations, including credit cards and car loans, before locking into a new deal.

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Outlook

The central bank is expected to decide again on October 29, 2025, with markets betting on at least one more cut before year-end. If confirmed, that could ease some of the burden on borrowers facing renewals in late 2025 and early 2026.

But even with lower policy rates, bond yields and global financial conditions will continue to shape fixed mortgage pricing, leaving homeowners in a delicate balancing act between affordability and stability.