31 Aug

Why Your Mortgage Renewal Could Mean a 20% Payment Jump in 2025 (and What to Do About It)

General

Posted by: Kartik Verma

Introduction

If your mortgage is up for renewal in 2025 or 2026, you’re not alone. According to the Bank of Canada, nearly half of all mortgages in Canada will come up for renewal in the next two years. For many Edmonton and Alberta homeowners, this could mean a 15–20% increase in monthly payments compared to what you’re paying now.

But don’t panic. There are strategies to soften the blow, and working with a mortgage broker can help you secure better terms than simply signing your lender’s first offer.

Why Are Renewals More Expensive in 2025?

  • Interest Rates Stayed Higher Longer – Even though the Bank of Canada has begun easing rates slightly, today’s renewal rates are still higher than the ultra-low rates people locked in back in 2020–2021.

  • End of Pandemic-Era Terms – Many borrowers who locked in at 1.5–2.5% are now facing renewals at 4.5–5.5%.

  • Stress Test Still Applies – Lenders must qualify you at a rate higher than your contract rate, which reduces flexibility.

📊 Example: A $400,000 mortgage at 2.25% had a payment of about $1,740/month. Renewed at 5.25%, that same mortgage now costs roughly $2,380/month — a 37% increase.

What You Can Do to Protect Yourself

  1. Start Early (120 Days Before Renewal)
    Many lenders let you lock in a renewal rate up to four months in advance. Don’t wait until the last minute.

  2. Shop the Market
    Your current lender may not offer you the best deal. As a mortgage broker in Edmonton, I work with 50+ lenders, including credit unions and alternative lenders, to find lower rates.

  3. Consider Your Mortgage Type

    • Fixed rates = stability.

    • Variable rates = more risk but could save money as rates drop further in 2025–2026.

  4. Review Your Amortization
    Extending your amortization (e.g., from 20 years to 25) can reduce your monthly payment, even if your interest rate is higher.

  5. Consolidate High-Interest Debt
    Renewal time is the perfect chance to roll in credit card or loan debt into your mortgage at a much lower rate.

Edmonton Homeowners: Why Local Advice Matters

The Edmonton housing market is more affordable than Toronto or Vancouver, but Alberta households are still feeling the squeeze of higher interest rates. A tailored renewal strategy can make the difference between staying comfortable and being stretched too thin.

As a mortgage agent licensed in Alberta, I help clients across Edmonton, Calgary, and Red Deer compare renewal offers, negotiate with lenders, and structure payments that fit their budget.

Call to Action (Lead Capture)

If your mortgage renewal is coming up in the next 12 months, don’t wait until you get a letter from your bank. Let’s start the process early and put you in the driver’s seat.

👉 Book your free consultation today:

I’ll review your options, shop the best rates in Alberta, and help you save money on your renewal.