By Sammy Hudes
A Royal LePage survey launched Thursday, performed by Hill & Knowlton, mentioned 57% of Canadians set to resume a mortgage on their main residence this yr anticipate their month-to-month cost to extend.
That features 22% who anticipate it to rise “considerably” and 35 per cent who suppose their cost will go up “barely.” One-quarter mentioned their month-to-month mortgage cost will stay about the identical and 15% anticipate it to lower upon renewal.
Royal LePage mentioned 1.2 million mortgages are up for renewal in 2025. Round 85% of these have been secured when the Financial institution of Canada’s key coverage charge sunk to traditionally low ranges — at or beneath one per cent — throughout the COVID-19 pandemic.
“We’re now 5 years from when these mortgages first grew to become obtainable so we’re getting these rolling over,” mentioned Royal LePage president and CEO Phil Soper in an interview.
“Whereas charges have been coming down quickly, they’re nonetheless effectively above what these tremendous low pandemic mortgages have been and individuals are involved.”
Amongst those that anticipate their month-to-month cost to rise, 81% mentioned the rise would put monetary pressure on their family. A lot of these mentioned they are going to scale back discretionary spending corresponding to on eating places and leisure, or reduce on journey to assist address the elevated prices.
In the meantime, 10% of respondents mentioned they’re contemplating downsizing, relocating to a extra reasonably priced area or renting out a portion of their dwelling in response to greater borrowing prices.
Soper mentioned a possible commerce warfare with the U.S., and the hurt the Canadian economic system may endure from President Donald Trump’s risk of 25% tariffs, is including to Canadian householders’ nervousness.
Nevertheless, he mentioned the Financial institution of Canada may loosen financial coverage in response to tariffs as a way to ease the burden on the economic system.
“We’ll see charges dropping, and we doubtlessly may see unemployment choosing up,” he mentioned.
“We may see GDP trending downward, and on the identical time as a result of our trade is so charge delicate, all that pent-up demand we’ve from the post-pandemic market correction … may very well be unleashed based mostly on very low borrowing prices.”
Whereas most households with pending renewals plan to take care of the identical kind of mortgage product they’ve, the report mentioned extra Canadians are exploring the choice of signing variable-rate mortgages.
Round two-thirds of respondents with a mortgage renewing this yr mentioned they plan to acquire a fixed-rate mortgage upon renewal, down from the three-quarters who at the moment have fixed-rate mortgages. Round 29% mentioned they are going to select a variable-rate mortgage, up from the 24% who at the moment have variable-rate mortgages.
Round 37% of all respondents mentioned they plan to go along with a five-year mortgage time period upon renewal, whereas 19% intend to signal on to a three-year time period.
Soper mentioned Canadians are inclined to gravitate towards 5-year fixed-rate mortgages, however that choice “doesn’t at all times make sense.”
“If you happen to’re in a interval of clearly declining rates of interest, as we’ve been for a few yr now, it actually doesn’t make a whole lot of logical sense to lock in for the long term,” he mentioned.
Final fall, Canada’s nationwide banking regulator introduced it will not require debtors with uninsured mortgages to bear a stress check when switching suppliers, so long as the amortization schedule and mortgage quantity stay unchanged.
Whereas a six-month variable-rate mortgage may be dearer within the short-term, Soper mentioned some households may imagine that choice shall be extra reasonably priced down the highway, since they might be capable to lock in a decrease rate of interest sooner or later.
“You’ve got to have the ability to afford the shorter-term variable-rate mortgage, however in the event you can, it’s simply making a whole lot of sense,” he mentioned.
This report by The Canadian Press was first revealed Feb. 20, 2025.
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shopper survey Editor’s choose Hill & Knowlton mortgage market mortgage market tendencies mortgage renewals mortgages in canada Phil Soper Royal LePage Royal LePage survey sammy hudes tariffs The Canadian Press
Final modified: February 20, 2025