If your mortgage is coming up for renewal, understanding the latest market updates and rules can help you make informed choices. With rising payments, policy changes and new lender options, borrowers now have more opportunities to manage their mortgage effectively. 
Rising Mortgage payments: What to Expect
Despite recent interest rate declines, mortgage renewals over the next few years will still see significant increases. Borrowers with mortgages up for renewal, who currently have an average mortgage rate of 3.60%:
- 2025 Renewals: An average monthly increase of $513 (22%)
- 2026 Renewals: Payments rising by an average of $458 (18%)
- 2027 Renewals: Payments increasing by an average $291 (10%)
Understanding these changes early, will help you prepare financially and explore options to mitigate the impact.
New Rules for Mortgage Switches
As of December 16th, 2024, borrowers looking to switch their mortgage to another lender at renewal, will no longer need to pass the mortgage stress test, provided they meet specific criteria
- Stress-test-free switches apply to both insured and uninsured mortgages
- Borrowers can qualify at the contract rate, instead of the stress test rate (e.g. Rate +2% or 5.25%)
Eligibility Criteria for Stress-Test-Free Switches:
- Loan-to-Value (LTV): Maximum 80%
- Mortgage Type: Renewals only (no early renewals)
- Lender Requirements: Original lender must be federally regulated and the new lender must be National Housing Act-approved
- Amortization: Must remain unchanged
- Loan Amount: Cannot increase, except for up to $3,000 to cover fees
5 Key Point to Remember at Mortgage Renewal
- Remaining Balance: Know the remaining principal on your mortgage. This forms the foundation for your next term and is an excellent time to review your financial goals with your mortgage broker
- Interest Rate: Explore fixed versus variable rates, to find the option that best aligns with your plans. Rates at renewal will likely differ from your original mortgage.
- Payment Frequency: Adjusting your payment schedule (e.g. switching to bi-weekly payments) can help you pay off your mortgage faster and save on interest costs.
- Mortgage Term: The term length you choose impacts future renewals and how you manage interest rate changes. Longer terms offer stability, while shorter terms provide flexibility. Discuss the pros and cons with your mortgage broker.
- Fees and Charges: Be aware of any fees, such as prepayment penalties, administrative costs, or charges for switching lenders. Clarifying these upfront helps avoid surprises.
What this means for you
With stress-test-free lender switches and rising payments, now is the perfect time to consult with your Maple Ridge Mortgage Broker. Whether it’s preparing for higher payments or funding a better lender, our team can help you optimize your mortgage strategy at renewal.
Original Article: www.canadianmortgagetrends.com
