The 2023 Mortgage Renewal Survey analyzed key trends among Canadian mortgage holders, and their concerns surrounding their impending mortgage renewals in today’s higher-cost borrowing environment.
According to the survey, 74 per cent of Canadians with a residential mortgage set to renew within the next 18 months say they are concerned about the renewal, in light of the series of interest rate hikes made by the Bank of Canada since March of 2022.
“Some Canadians with variable-rate mortgages have seen their monthly payments double or even triple over the last year and half, due to the Bank of Canada’s aggressive interest rate hike campaign aimed at tamping down high inflation. Those locked in to a fixed-rate mortgage, which most are, have been protected from those increases, at least for a short time,” said Karen Yolevski, chief operating officer, Royal LePage Real Estate Services Ltd. “While the central bank’s key lending rate is expected to come down in the medium term, the likelihood that we will return to rock-bottom rates of less than one per cent is very low. Upon renewal, fixed-rate mortgage holders will be faced with a new reality – higher monthly payments.”
Key highlights from the release include:
- 31% of all mortgagees in Canada say their lending agreement is set to renew within the next 18 months, meaning that 3.4 million Canadians have a mortgage set to renew by March 2025.
- Almost three-quarters (74%) of Canadian mortgage holders currently have a fixed-rate mortgage; 20% have a variable-rate mortgage.
- 40% of variable-rate or hybrid mortgage holders concerned about their upcoming renewal say they plan to switch to a fixed rate.
- 64% of variable-rate or hybrid mortgage holders say that higher interest rates have caused their mortgage payment to hit its trigger rate and thus increased their monthly cost.
- 76% of variable-rate or hybrid mortgage holders say that higher interest rates have caused financial strain on their household, causing them to reduce spending and dip into savings.