Navigating Your Mortgage Renewal in 2025: What Ontario Homeowners Need to Know

If your mortgage is coming up for renewal this year, you’re in good company. According to the Bank of Canada, about half of all Canadian mortgages are due to reset between 2024 and 2026, and 2025 is a peak year for renewals. The kicker? Most of these were originally taken out or last renewed when interest rates were at historic lows—often in the 1.5% to 2.5% range.

Fast forward to now, and while the Bank of Canada has begun cutting rates, the current overnight rate is still holding at 4.50% (Bank of Canada). That means many Canadians are facing the reality of renewing their mortgage at rates double—or even triple—what they’re used to.

The Reality of Rising Payments

Royal LePage recently reported that 57% of homeowners expect their mortgage payments to increase at renewal in 2025, and 22% anticipate “significant” increases (Canadian Mortgage Trends). It’s not just speculation either—renewals are happening every day, and the difference in monthly payments is often hundreds of dollars.

What’s more, 81% of respondents said these higher payments would impact their household finances. Some are trimming their spending, others are tapping into savings, and some are even thinking about selling and downsizing. It’s a stressful moment, especially if you weren’t expecting such a sharp jump.

So what can you actually do about it?

Steps to Navigate Your Renewal with Confidence

1. Start Early.

Don’t wait for your lender’s renewal letter to show up in the mail. Most lenders will hold a rate for up to 120 days (that’s about 4 months), so starting early gives you a valuable head start. This is your chance to shop the market and secure a better deal—especially if rates are forecasted to go up again.

2. Explore All Your Options.

When your mortgage comes up for renewal, you’re not locked into your current lender or product. This is your opportunity to rethink your strategy. Should you switch from variable to fixed? Can you shorten or lengthen your amortization? Should you consolidate other debts into your mortgage? A mortgage broker can walk you through these decisions and run the numbers for you.

3. Don’t Assume Your Renewal Offer Is the Best Deal.

Many lenders send out renewal offers that aren’t actually their best rates. They’re counting on you to sign on the dotted line without asking questions. But in today’s rate climate, every percentage point counts. Even a small difference in rate can mean thousands of dollars saved over your term.

4. Budget for the New Reality.

If it turns out your new payment is going to be higher, now’s the time to adjust your budget. That might mean reviewing your monthly expenses, building a buffer for unexpected costs, or setting new savings goals. It’s not the most fun conversation—but it’s a necessary one.

5. Use This as a Moment to Reassess.

Renewals aren’t just about the rate. They’re a good time to take stock of your overall financial picture. Are you planning to move in the next couple of years? Thinking about renovations? Hoping to retire soon? All of these factors can influence the kind of mortgage that’s best for you now.

Canada’s mortgage market is in a state of transition. The rate hikes of the past few years are still working their way through the economy, and while the Bank of Canada has hinted at future cuts, inflation concerns continue to hover in the background. That means the best move you can make right now is to be proactive and informed.

Mortgage renewal isn’t just a box to check off. It’s a major financial decision that deserves time, attention, and a good strategy behind it. Whether that means locking in a fixed rate for peace of mind, riding the wave with a variable, or exploring blended options—what matters most is that you feel confident in your next step.