More Than A Third Of Pandemic-era Borrowers Expecting Higher Mortgage Rates At Renewal, New Report Says

The last tranche of Canadian homeowners facing a post-pandemic mortgage renewal wave are feeling anxious about their finances taking a hit from higher payments, with more than a third expecting higher rates , according to a new report.

About 38 per cent of Canadians with a mortgage on their primary residence expect their mortgage payments to increase upon renewal, with 26 per cent anticipating a slight increase and 12 per cent predicting a significant jump, according to a Royal LePage survey conducted by WPP PLC-owned public relations company Burson, released on Wednesday.

However, the majority of those facing a mortgage renewal (71 per cent) said they won’t be making any changes to their living arrangements, such as relocating, renting or downsizing, to afford higher payments .

“It’s not surprising at all that (homeowners are) anxious about what’s going to happen when they have to pay normal rates when they’ve had discounted rates for so long,” said Phil Soper, president and chief executive of Royal LePage, who added this cohort of homeowners have benefited from a period of record-low mortgage rates and are now facing more typical rates.

The Bank of Canada’s overnight rate has sat at 2.25 per cent since October, but the ongoing war in the Middle East has put upward pressure on bond yields in recent months, slightly lifting fixed mortgage rates .

More than a third of respondents said they feel more anxious about the renewals compared with their previous renewals, concentrated among homeowners who last renewed their mortgage in 2021 or 2022, when the overnight rate sat at record lows. Fears are also higher among homeowners in Canada’s priciest housing markets in Toronto (39 per cent) and Vancouver (45 per cent).

But Soper said these concerns have more to do with higher home values in these cities than the mortgage renewals themselves. “It takes more of their disposable income to service the mortgage.”

More than three-quarters of those expecting an increase in their monthly payments said it will put pressure on their household finances, with 30 per cent anticipating this strain could be significant.

About 58 per cent of those anticipating financial strain upon renewal say they will reduce their discretionary spending. Close to half plan to cut back on travel and 38 per cent say they intend to delay or cancel home renovations.

Soper said this latest Royal Le Page survey also reveals pandemic-era homebuyers are less anxious now about mortgage renewals than they were before.

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Though in previous years some market watchers raised fears over a massive rise in mortgage defaults, Soper said he did not share these concerns given the introduction of Bill 20, which meant homebuyers had to show they could handle higher payments than what they were taking on at the time. “(This) was, to me, a safety net that would prevent the market from turning very dark.”

The national 90+ day delinquency rate slightly ticked up to 0.24 per cent in the fourth quarter of 2025 (up from 0.21 per cent a year prior) but was still below pre-pandemic levels, according to the latest data from the Canada Mortgage and Housing Corporation .

Soper added that wages have slightly outpaced inflation since 2021, which has meant homeowners’ salaries have likely increased by about 11 or 12 per cent since the time they took out their mortgage. The job market has remained relatively resilient during the U.S. trade war as well, he said.

“Incomes are higher yet home prices are the same or lower and interest rates aren’t particularly high,” he said, adding that current five-year fixed-rate mortgage rates are at about four per cent. “People are in better financial shape.”

• Email: slouis@postmedia.com