Riding the Renewals Wave: Why Late 2025 Is Critical for Mortgage-Renewing Homeowners

John Lee - Arise Mortgage
5 days ago
2 min read

How to Navigate Canada’s Mortgage Renewal Wave in Late 2025

If your mortgage is coming up for renewal soon, you’re not alone. Canada is entering what experts are calling a renewal wave. It’s a period where a record number of homeowners will face new mortgage terms and interest rates. According to Reuters, millions of Canadians are approaching renewal in the next year, making late 2025 one of the most pivotal moments for borrowers in over a decade.

Why This Renewal Season Matters More Than Ever

The Bank of Canada’s recent decision to cut its key rate to 2.25% (October 29, 2025) has brought cautious optimism to the market. While this could provide some relief for those facing renewal, the landscape remains complex. Many homeowners who locked in at ultra-low pandemic rates are still preparing for payment adjustment, even if rates are finally easing.

Understanding how this shift affects your finances can help you renew strategically and save thousands over your next term.

What the “Renewal Wave” Really Means

Scale: More than 60% of Canadian mortgages are expected to renew by the end of 2026.
Timing: The majority of renewals will happen between late 2025 and mid-2026.
Impact: Homeowners may see rate adjustments ranging from slight relief to continued strain, depending on when they first signed their mortgages.

This surge in renewals means lenders are competing for business. This is a great opportunity for borrowers to shop around and negotiate better terms.

How to Evaluate Your Renewal Options

When your term ends, you have three main paths:

Stay with your current lender: Convenient, but not always the best rate. Always compare.
Switch lenders: Another lender may offer lower rates or better terms.
Refinance: Adjust your loan amount, amortization, or debt structure for flexibility.

Pro Tip: Even if rates drop slightly, refinancing can still reduce payments or help consolidate other debts, especially if you’ve built home equity.

Understanding Payment Shock

Even small rate increases can impact your monthly budget. For example, a $500,000 mortgage renewed at just 1% higher could increase payments by roughly $250 per month. Reviewing these numbers early can help you plan your budget and avoid surprises.

Steps to Prepare for Renewal

Start 12 months early: Review your mortgage and track rate trends.
6 months before renewal: Ask your broker for a pre-approval or rate hold.
Compare lenders: Don’t automatically sign your lender’s renewal letter — negotiate.
Check your credit: A higher score can unlock better rates.
Model scenarios: Run comparisons for 1-, 3-, and 5-year terms to find the balance between flexibility and savings.