The Great Mortgage Renewal of 2025

The Great Mortgage Renewal of 2025: How to Secure the Best Rate and Save Money

By Raj Sharma - Mortgage Advisor

Millions of Canadians will be renewing their mortgages in 2025, and for many, this will mean adjusting to much higher interest rates than they initially secured.

If you locked in a mortgage rate between 1% and 2.5% during the pandemic, you might be facing a much steeper renewal rate today.

However, there’s good news—lenders are competing fiercely for your business, which gives you leverage to secure the best mortgage renewal deal and protect your budget.

Why Are Mortgage Renewals in 2025 So Important?

Over 1.2 million mortgages, worth nearly $590 billion, will be up for renewal this year. With current rates hovering between 4% and 6%, many homeowners will see a jump in their monthly payments.

The Bank of Canada (BoC) recently cut its key policy rate to 3%, signalling the potential for even lower rates ahead.

That means homeowners who shop around and compare their options can potentially save thousands of dollars.

What Does the Bank of Canada’s Rate Cut Mean for You?

1. Lower Variable Rates: If you have a variable-rate mortgage, expect your payments to decrease further if the BoC continues cutting rates.
2. Possible Fixed Rate Drops: Fixed mortgage rates follow bond yields, and if they continue to decline, we could see more affordable fixed-rate options.
3. Time Your Renewal Strategically: If more rate cuts are expected, some homeowners may opt for a short-term fixed mortgage or stay variable for the time being.

How Lenders Are Competing for Your Mortgage Renewal

Big Banks: Canada’s Big Six banks (RBC, TD, BMO, Scotiabank, CIBC, and National Bank) control 75% of the mortgage market. They want to keep their clients, so they are offering:

• Rate Matching: If you get a lower offer from another lender, banks may match it.
• Bundled Services: Some banks offer perks like HELOCs, cashback, or waived fees.
• More Digital Services: Renewals are becoming more straightforward with online options.

Alternative?and?digital Lenders?Are shaking up the market by offering rates?10 to 40 basis points lower?than traditional banks. As a result, more Canadians are?switching lenders?for better rates.

How Much Can You Save by Shopping Around?

Even a 0.40% lower rate can save you thousands over time. Here’s an example:

• $500,000 mortgage at 4.39 % broker vs. 5.08% (Big Banks) → $11,700 approx saved in interest over 5 years.
• $100,000 mortgage at 3.99 vs. 5.02% (Big Banks) → $3000 approx in savings + more principal paid off.

How to Get the Best Mortgage Renewal Rate in 2025

1. Start Early: Many lenders offer rate holds up to 120–150 days before renewal. Lock in early to protect against rising rates.
2. Compare Offers: Never accept your first renewal offer. Speak with your lender, a mortgage broker, and alternative lenders.
3. Choose the Right Mortgage Type: Fixed Rate: Stability & predictability. Variable Rate: Potential for lower payments if rates continue dropping.
4. Negotiate & Leverage Lender Incentives: Ask your bank to match lower rates or provide incentives like cashback or waived fees.
5. Consider Economic Factors: If a U.S.-Canada trade war impacts inflation and the economy, the BoC may cut rates further—making variable rates more attractive.

Final Thoughts: Make Lenders Compete for You

With millions of renewals happening in 2025, lenders are fighting for your business.

Whether you stay with your bank or switch to a lower-rate lender, ensure you get the best deal possible.

Don’t settle—negotiate, compare, and save.

Need help securing the best mortgage renewal rate?

Contact me to explore your options today!

Reach Out for discussion.