The Canadian mortgage market is facing uncertainty, with over one million fixed-rate mortgages set to renew in 2025. While some homeowners are absorbing higher payments, others are struggling as defaults continue to rise. 
Mortgage Renewals and Rising Defaults
Equifax reports a 43% year-over-year increase in past-due mortgage balances, signaling growing financial strain. Although interest rate cuts and declining bond yields have softened the impact, many borrowers remain anxious about their upcoming renewal.
The Role of the Stress Test
One factor helping to stabilize the market is the mortgage stress test. Borrowers were required to qualify at rates up to 5.25% or 2 percentage points above their contract rate, proving they could handle higher payments. This has helped prevent widespread financial fallout.
What’s Next for Homeowners?
Despite recent rate cuts, financial institutions and economists warn that many homeowners will still face higher payments at renewal. Homeowners should explore options such as refinancing, switching to fixed rates, or adjusting their budgets.
If your mortgage is up for renewal, reach out to us at Client First Mortgage Solutions, to explore the best option for your situation.
