Buckle Up, Homeowners: One Million Mortgage Renewals Incoming — And It's About to Get Real
Oh, the joys of adulting — just when you think you’ve got a handle on your budget, along comes your mortgage renewal to shake things up like a toddler on a sugar high.
So here’s the deal: Canada’s mortgage market is technically rebounding, but before we start high-fiving each other, let’s take a look under the hood. According to Equifax’s latest Q4 Consumer Trends report, new mortgage activity jumped 39% compared to last year. Sounds great, right? Except over half of those “new” mortgages are just people renewing or refinancing their existing ones. Translation: this rebound is more of a “hang in there” than a “we’re back, baby!”
And here's the kicker — over one million fixed-rate mortgages are set to renew in 2025. Yes, one million. That’s a lot of people about to face the music, especially if they locked in during the golden days of 2020 when rates were so low they almost felt like a scam (spoiler: they weren’t).
Payment Shock Is Coming In Hot 🔥
Remember when you could snag a 5-year fixed mortgage rate under 2%? Good times. Fast forward to now, and those same folks are staring down renewal offers at much higher rates — cue the “payment shock.” That’s finance-speak for “holy crap, why is my monthly payment so much higher?!”
And while rates have started to come down, Equifax wants you to know that any real relief probably won’t hit until mid-2025. In other words, don’t expect a knight in shining armor (aka rate cuts) to save the day just yet.
Lenders Are Getting Switched Faster Than Netflix Subscriptions
More borrowers are giving their old lenders the “it’s not me, it’s you” treatment — 29% switched lenders in 2024, up from 26% in 2019. Part of that is thanks to some OSFI guideline changes, which now let folks switch lenders without going through the dreaded stress test. One small win for the mortgage-weary.
Meanwhile… Credit Cards Are Screaming Too
It’s not just mortgages causing financial heartburn. Credit card spending jumped 2.2% in 2024, marking the busiest December since 2020 — probably thanks to that holiday tax break the government tossed our way.
But while spending is up, so are delinquencies. Turns out, a lot of younger Canadians are riding the “minimum payment” train, and it’s not headed anywhere good. Delinquency rates on credit cards have surged 16.5% year-over-year, which has lenders clutching their pearls and getting a little more cautious.
Older folks with HELOCs seem to be managing fine — because of course they are — but younger generations are juggling higher living costs, inflation, and now, steeper payments across the board. Fun, right?
Mortgage Defaults? Yup, Those Are Up Too 📈
Mortgage defaults have climbed 43% since last year, with more people falling behind by 90+ days on their payments. Equifax says the percentage of mortgages overdue by 90+ days is now 0.20%, up from 0.14% in Q4 2023 — and yes, that’s higher than pre-pandemic levels.
If you’re in Ontario or BC, brace yourself: delinquency rates in both provinces have hit new highs. Over 10% of mortgage renewals in Q4 saw monthly payments jump by $500 or more. That’s like suddenly being told you have to buy a new iPhone every single month. Ouch.
Don’t Leave Your Mortgage Renewal To The Last Minute - Start The Process 3 to 4 Months BEFORE Your Mortgage Renews
If your mortgage is coming up for renewal soon — or if you just enjoy anxiety-inducing financial updates — now’s the time to get proactive. Rates might not be at all-time highs anymore, but they’re definitely still high enough to make a serious dent in your budget.
The good news? There are ways to manage the madness. Whether it’s switching lenders, negotiating better terms, or just figuring out how to make your money work smarter (not harder), I’m here to help. Let’s chat before your renewal turns into a financial rollercoaster you didn’t sign up for.