For many Canadians, 2025 marks a critical year for mortgage renewals. With thousands of homeowners coming up for renewal after borrowing at ultra-low pandemic rates, the financial adjustment can be significant. But preparation is key — and the good news is, you have more control than you might think.
Start Early — Don’t Wait for Renewal Day
Most lenders send renewal offers about four months before your term ends, but you don’t have to wait for that letter. In fact, you shouldn’t. Starting the renewal process six months early gives you time to compare offers and negotiate. Mortgage brokers can help you explore options across multiple lenders instead of automatically accepting your bank’s offer.
Understand Today’s Rate Environment
While interest rates have stabilized in 2025, they remain higher than the record lows of 2020–2021. Many homeowners renewing now will see their rates jump from 2% to 5% or more. This change can increase monthly payments by hundreds — or even thousands — of dollars.
Use this time to assess your cash flow, debts, and savings. If needed, consider adjusting your amortization period to help ease monthly payment pressure.
Review Your Financial Health
Lenders will reassess your financial situation, including income, debts, and credit score. Before renewal:
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Pay down high-interest debt (like credit cards).
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Avoid new loans or large purchases.
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Check your credit report for errors.
A few small improvements can make a big difference in the rate you qualify for.
Consider Switching Lenders
You’re not obligated to stay with your current lender. If another lender offers a better rate or terms, you can switch. Keep in mind, you may need to requalify under the mortgage stress test, which requires proving you can afford payments at the higher of your contract rate plus 2% or the benchmark rate (currently 5.25%).
Explore Your Options
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Fixed vs. Variable: If you’ve been on a fixed rate, this might be a time to consider variable — or vice versa — depending on market conditions and your comfort with risk.
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Blend and Extend: Some lenders let you combine your old rate with a new one, smoothing the jump in payments.
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Early Renewal: Lock in early if rates seem poised to rise again.
Negotiate!
Your lender expects you to negotiate — so don’t be shy. Even a 0.25% reduction can save thousands over the term. A broker can often secure better terms by shopping your profile to multiple lenders.
Renewals don’t have to be stressful. By starting early, reviewing your finances, and comparing offers, you can navigate your 2025 mortgage renewal confidently — and possibly come out ahead.