{"id":120525,"date":"2025-10-14T02:29:22","date_gmt":"2025-10-14T02:29:22","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/120525\/"},"modified":"2025-10-14T02:29:22","modified_gmt":"2025-10-14T02:29:22","slug":"how-to-prepare-for-higher-mortgage-payments","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/120525\/","title":{"rendered":"How to prepare for higher mortgage payments"},"content":{"rendered":"

Christopher Liew is a CFP\u00ae, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial<\/a>.<\/p>\n

Many homeowners could be in for an unpleasant surprise the next time their mortgage comes up for renewal.<\/p>\n

Over the past five years, mortgage rates have climbed sharply from historic lows, leading to significantly higher monthly payments for many borrowers. For some, this could even mean getting priced out of their own home and having to look for alternative living arrangements.<\/p>\n

Here\u2019s a look at how interest rates have changed in recent years, where they could be going, and some of the driving factors behind mortgage renewal shock, so you can start to prepare financially.<\/p>\n

How mortgage rates have changed recently<\/p>\n

According to the Bank of Canada, many homeowners renewing in 2025 – 2026 will face payment increases ranging from 15 to 20 per cent. An unlucky 10 per cent of buyers could be facing payment increases of up to 40 per cent<\/a>.<\/p>\n

Mortgage rates in Canada have moved sharply over recent years. Historically, five-year fixed conventional mortgage lending rates ranged in the four to six per cent zone<\/a> in the early 2020s. By 2023-2024, though, they began to climb as high as eight per cent. It\u2019s since then dropped back down to around six per cent.<\/p>\n

While the current rates seem to have cooled slightly over this past year, most homeowners renewing this year, compared to their previous 2020 mortgage rate, will see a payment increase. The exception to this rule may be homeowners who\u2019ve been overpaying their mortgage and have built more equity in their homes.<\/p>\n

These shifts are primarily driven by the Central Bank\u2019s policy rate, which pushes lenders to raise their mortgage offers. For many homeowners, a \u201clow\u201d fixed rate locked in a few years ago now looks generous.<\/p>\n

Higher mortgages will affect all homeowners<\/p>\n

This July, the CMHC reported<\/a> that the average mortgage payment during the first quarter of 2025 was $2,086. For reference, homeowners with this current payment could face the following increases, depending on their mortgage renewals:<\/p>\n