How will mortgage payments change at renewal? An updated analysis

About 60% of all outstanding mortgages in Canada are expected to renew in 2025 or 2026. In this note, we provide an updated assessment of how mortgage payments may change for these households at renewal. To do so, we use an enhanced dataset on the stock of real estate secured lending. We make two assumptions in our assessment: Interest rates evolve in line with financial market expectations. At renewal, all borrowers renew into the same type of mortgage they already had for the same term. Based on those assumptions, we find the following: About 60% of mortgage holders renewing in 2025 and 2026 are expected to see a payment increase. Most of these borrowers hold a five-year, fixed-rate mortgage. Compared with December 2024 payments, the average monthly mortgage payment could be 10% higher for those renewing in 2025 and 6% higher for those renewing in 2026. These overall numbers, however, hide large differences between borrowers and between types of products. For instance, mortgage holders with a five-year, fixed rate contract renewing in 2025 or 2026 could face an average payment increase of around 15%–20% compared with their payment in December 2024. Those with variable rates and variable payments could see an average payment decline of around 5%–7%.