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:

• 📅 Schedule online

• Or apply directly on my website: kartikverma.ca

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

If your mortgage term is ending and your credit score isn’t as strong as you’d like, you may worry about whether you’ll be able to renew or refinance. The good news is that a low score doesn’t automatically bar you from getting a new mortgage—but it can limit your options and cost you more in interest. Here’s how to approach renewal and refinancing when your credit needs work.

What counts as a bad credit score?

Credit scores in Canada range from 300 to 900. On the mortgage‑renewal scale, a “bad” credit score is usually anything below 600. Scores in the “fair” range (560‑659) may still allow you to renew, but anything under 600 raises red flags for lenders. A low score typically signals missed payments, high debt levels or limited credit history.

How does poor credit affect your renewal?

Lenders see borrowers with low scores as higher risk, which can lead to several outcomes:

• Higher interest rates. To offset risk, lenders may offer higher rates, leading to larger monthly payments.

• Fewer choices. A weak credit profile may limit the types of mortgages or lenders available.

• Shorter terms. Some lenders will renew you for only one or two years to see if your situation improves.

• Denial of renewal. In extreme cases, lenders may refuse to renew your mortgage.

Strategies to renew your mortgage with bad credit

1. Talk to your current lender

Start by speaking with your existing lender. They know your payment history and may be willing to renew even with a lower score. If you’ve made timely payments and built a good relationship, they might offer a renewal and possibly recommend hardship programs or options like adding a co‑signer.

2. Shop around for other lenders

If your current lender won’t budge, shop around. Some lenders specialize in high‑risk borrowers and may offer better interest rates, flexible repayment terms, or incentives such as cash‑back offers. Comparing quotes can uncover options you didn’t know existed.

3. Consider a co‑signer

A co‑signer with stronger credit can boost your application. This person (usually a family member) guarantees the loan and promises to make payments if you can’t. Having a co‑signer can help you get lower rates and better terms. Remember: missing payments still hurts both your credit and your co‑signer’s.

4. Work with a mortgage broker

Mortgage brokers have relationships with a wide range of lenders, including those who work with clients who have less‑than‑ideal credit. They can do the legwork of comparing options and negotiating on your behalf. Brokers are especially helpful if you’re unsure which lenders will consider your application.

5. Explore alternative options

• Refinancing your mortgage. Refinancing can replace your current mortgage with a new one, potentially lowering your monthly payment or changing the loan term. However, refinancing with bad credit is challenging, and lenders may charge higher rates or impose stricter conditions. If you have equity in your home, refinancing may be easier. You could also consolidate higher‑interest debt through a refinance, but this increases the total size of your mortgage.

• Private lenders. If traditional banks decline you, private lenders are more flexible with credit scores, focusing more on your property’s value. Be cautious—private mortgages often have higher interest rates and shorter terms.

• Downsizing or boosting your down payment. Selling your home and buying a smaller property can reduce your debt, making mortgage renewal easier. Alternatively, if you’re considering refinancing or buying a new property, saving for a larger down payment lowers your loan‑to‑value ratio and can lead to better terms.

Tips to improve your credit before renewal

Strengthening your credit score is the best way to secure better mortgage terms:

• Pay bills on time. Set up automatic payments or reminders to avoid missed or late payments.

• Reduce credit card balances. Keep balances below 30% of your available credit to improve your score and your debt‑to‑income ratio.

• Diversify your credit. A mix of credit types (credit cards, installment loans, and lines of credit) can help, but avoid opening new accounts right before renewal.

• Check your credit report. Review your report for errors and dispute inaccuracies.

Talk to a mortgage professional

Even with credit challenges, you have options. A mortgage professional can access multiple lenders and products, including specialized programs for self‑employed borrowers, rental‑purchase plans, and interest‑only loans. As part of networks like Dominion Lending Centres, mortgage professionals send millions of dollars of business to banks and credit unions, giving clients access to hundreds of mortgage products. They can help you identify strategies to renew, refinance, or repair your credit, and there is usually no cost to work with them because lenders pay their fees.

Ready to explore your renewal options? Reach out for a personalized review of your situation. With the right guidance, you can secure a mortgage that works for you—even if your credit score isn’t perfect.

Whether you’re a first-time homebuyer, renewing your mortgage, or refinancing, one of the most important questions you’ll face is

Should I go with a fixed or variable rate?

Let’s break it down so you can make the decision that works best for you.

🔒 What Is a Fixed Rate?

A fixed-rate mortgage means your interest rate and monthly payment stay the same for the term of your loan—often 1, 3, or 5 years.

✅ Pros:

• Predictable payments = easy budgeting

• Peace of mind during rate hikes

• Great for risk-averse borrowers

❌ Cons:

• Typically starts higher than variable

• Penalties can be higher for breaking your mortgage early

🔄 What Is a Variable Rate?

A variable-rate mortgage means your interest rate can fluctuate based on the Bank of Canada’s prime rate.

✅ Pros:

• Often starts lower than fixed rates

• Can save you money if rates stay low or drop

• Easier to break early in some cases

❌ Cons:

• Payments may increase if rates rise

• Less predictability = more financial risk

🧠 What’s Happening in 2025?

As of mid-2025, the Bank of Canada has held interest rates steady after a series of increases in 2022–2023. While rate cuts may be on the horizon, inflation is still a concern.

👉 For many clients right now, a short-term fixed rate (1–3 years) offers a safe middle ground.
But if you’re comfortable with some risk, variable rates could save you money in the long run — especially if rates start to drop in late 2025 or 2026.

🏡 My Advice?

There’s no one-size-fits-all answer.
It depends on your income, lifestyle, long-term plans, and comfort with risk.

As a mortgage agent, I’ll help you run the numbers and see how each option fits your unique situation.

📲 Ready to Talk?

Let’s explore your best strategy.
Contact me or download my app to get started — your personalized mortgage plan is just a click away.