Over One Million Canadian Mortgages Up for Renewal in 2025

With over 1.2 million fixed-rate mortgages set for renewal in 2025, many Canadian homeowners will face significantly higher interest rates than when they first signed their loans.

Most of these mortgages were locked in when the Bank of Canada’s policy rate was below 1%, but today’s borrowers must navigate a very different landscape, with rates currently around 5% (as of 2023).

While higher mortgage rates are unavoidable, strategic planning can help borrowers minimize costs and secure better mortgage terms. Banks and lenders are also competing to retain customers and attract new clients, which means borrowers have negotiating power. Additionally, recent changes in mortgage rules make it easier to switch lenders for a better deal.

Why Comparing Mortgage Offers Can Save You Thousands

One of the best ways to save money on a mortgage renewal is to shop around and compare offers from multiple lenders before your renewal date.

Why Shopping Around Works

📌 Lenders are actively competing to attract customers, meaning lower rates and better terms are available.
📌 Borrowers can negotiate penalties when breaking existing contracts early.
📌 New mortgage regulations make it easier to switch lenders, reducing restrictions for borrowers seeking better terms.

New Mortgage Rules Make Switching Lenders Easier

A key change in mortgage regulations has made it easier for Canadians to switch lenders without facing additional financial hurdles.

What Has Changed?

📌 The Office of the Superintendent of Financial Institutions (OSFI) announced in September 2024 that uninsured borrowers switching lenders for renewal purposes no longer need to pass a mortgage stress test.

What Is the Mortgage Stress Test?

Traditionally, borrowers had to qualify at the higher of:
✔ 5.25%
✔ Or 2% above their actual mortgage rate

This was a significant barrier for many homeowners looking to switch lenders because their financial situation may have changed since their original mortgage approval.

How This Helps Borrowers

🔹 If your current lender offers a high rate, you can shop around for a better deal without worrying about stress test restrictions.
🔹 More borrowers now qualify for competitive rates from different lenders.
🔹 Encourages lender competition, leading to better mortgage options for homeowners.

💡 However, switching lenders still requires a formal application, including:
✔ Proof of income (pay stubs, tax documents)
✔ A credit check
✔ Potential home appraisal

How to Get the Best Mortgage Rate in 2025

✔ Start shopping around early – Compare rates from multiple lenders months before renewal
✔ Negotiate with your current lender – Use competing offers as leverage to get a lower rate
✔ Take advantage of new mortgage rules – Consider switching lenders without facing the stress test
✔ Look for flexible terms – Some lenders now offer waivers on penalties when switching from variable to fixed rates

With interest rates much higher than five years ago, being proactive and informed will help borrowers minimize mortgage costs and secure the best deal in 2025.