Over the next few months, we’re heading into one of the largest mortgage renewal waves Canada has seen in decades, and it’s something I’ve been talking about more and more with clients lately.
According to Canada Mortgage and Housing Corporation, about 1.15 million mortgages are set to renew this year. That’s a significant portion of homeowners, and for many, these mortgages were originally locked in when interest rates were much lower than they are today.
Understandably, a lot of people are starting to wonder what their next payment might look like, and what they should be doing now to prepare.
Why starting early really matters
One thing I always tell clients is that renewal is one of the few times you can make changes to your mortgage without penalty. And the earlier you start looking at your options, the more control you have over the outcome.
Most lenders send out renewal notices several months in advance, sometimes up to six months before your maturity date. While that might feel early, I actually see it as an opportunity.
Starting early gives you time to:
Review your options without pressure
Understand what your new payments could look like
Make a plan that fits your current lifestyle and goals
Even if you ultimately stay with your current lender, having that plan in place ahead of time can take a lot of stress off your plate.
Understanding payment shock (and how to manage it)
One of the biggest concerns I’m hearing right now is around higher payments. That jump in monthly payments when renewing at higher interest rates can cause a lot of stress, especially when we have economic uncertainty.
The first step is simply understanding the numbers. What will your payment look like at today’s rates? And how does that fit into your monthly budget?
If it feels like a stretch, there are options worth exploring.
For example, extending your amortization can help lower your monthly payments by spreading them over a longer period. While that may increase the total interest paid over time, it can provide some much-needed breathing room in the short term.
In some cases, refinancing might also make sense, especially if you have built up equity in your home. This could allow you to consolidate higher-interest debt, improve your cash flow, or restructure your mortgage to better align with where you are today.
Every situation is different, but the key is knowing what options are available before you make a decision.
It’s not just about the rate
It’s easy to focus only on the interest rate at renewal, but I always encourage clients to look at the bigger picture.
Features like prepayment options, penalties, and portability can have a big impact on how your mortgage works for you over the next few years. Sometimes, a slightly higher rate with better flexibility can actually be the better choice long-term. Or you could consider the lower rates and flexibility that comes with a variable rate mortgage in comparison to a fixed rate mortgage.
Renewal is also a great opportunity to reset and make sure your mortgage still aligns with your goals, whether that’s paying it down faster, improving cash flow, or planning for future moves.
Final thoughts
Mortgage renewal doesn’t have to feel overwhelming. In most cases, it just comes down to reviewing your numbers, understanding your options, and making a plan early.
If your mortgage is coming up for renewal this year, I’m always happy to walk through it with you and help you make sense of it all. My goal is to make sure you feel confident in your decision, not rushed into one.
The one thing I would strongly recommend? Don’t leave it until the last minute, and avoid letting your mortgage automatically renew without reviewing your options first. A little bit of planning now can make a big difference later.