July 17, 2025
RED FM News Desk
Roughly 60% of Canadian mortgage holders are set to face higher monthly payments when their loans come up for renewal in 2025 and 2026, according to a new report from the Bank of Canada.
In its latest staff analytical note, the Bank stated that while mortgage interest rates are expected to gradually decline, most borrowers will still see payment increases compared to their current contracts. Many of these existing agreements were signed during periods of significantly lower interest rates.
The report estimates that in 2025, homeowners renewing their mortgages will experience an average increase of 10% in their monthly payments compared to December 2024 levels. Looking ahead to 2026, this increase is projected to moderate slightly, to around 6%.
The extent of these payment increases will vary depending on the mortgage type. The Bank highlights that borrowers with fixed-rate mortgages, especially those on five-year terms, are likely to see the steepest jumps in payments, averaging between 15% and 20%. These borrowers constitute 40% of all mortgages in Canada and are largely driving the overall upward pressure on renewal payments.
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