Posted On Sep 19, 2025

There’s a massive financial wave building, and it’s set to crest by the end of 2026. By that time, an estimated 76% of all Canadian mortgages taken out during the rock-bottom rate era of 2020-2022 will have come up for renewal.

 

If you’re one of these homeowners, you’re likely staring down the barrel of a new, much higher interest rate. The difference between a 1.99% rate from 2021 and a 4.75% rate today isn’t just a number on a page—it’s a reality that can increase your monthly payment by hundreds, or even thousands, of dollars.

This is "payment shock," and it's a source of major anxiety for families across the GTA. But stress is not a strategy. Preparation is. Here’s how you can face your renewal with a plan, not panic.

1. Understand the Math: Face the Numbers Now

The worst thing you can do is bury your head in the sand. Your lender will send you a renewal slip a few months before your term is up, but you should be proactive long before that.

Use an online mortgage calculator or, better yet, call a mortgage professional to run the numbers. Let's see what a new payment would look like at today's rates.

For example, on a $650,000 mortgage with 20 years remaining:

  • At 2.25%, your monthly payment is approximately $3,295.

  • At 4.75%, that same payment jumps to approximately $4,115.

That’s a difference of $820 per month. Knowing this figure 6-12 months in advance gives you time to adjust your budget, not your lifestyle (in a panic).

 

2. Start Your "Renewal Diet" Early

Once you know your potential new payment, start "practicing" it. For the 6 months leading up to your renewal, transfer the difference ($820 in our example) into a separate savings account on the same day your mortgage payment comes out.

This does two incredible things:

  • It stress-tests your budget. You’ll quickly see if the new payment is comfortable or if you need to make other adjustments.

  • It builds an emergency fund. By the time you renew, you’ll have a lump sum of nearly $5,000 saved up, which you can use for a prepayment, to cover closing costs if you switch lenders and the new lender doesn’t have a current switch promotion, or simply keep as a buffer.

 

3. Don’t Just Sign the Slip: Shop Around

Your current lender is counting on you to take the path of least resistance and simply sign the renewal form they send you. This can be a costly mistake. They often present rates that are good, but not their best. Their offer is based on convenience, not competition.

As a mortgage agent, I can tap into a network of dozens of lenders, including banks, credit unions, and trusts. We create a competitive environment where lenders have to offer their sharpest rates and best terms to earn your business. This process alone can save you thousands over the course of your next term.

4. Consider a Strategic Restructure

Your renewal isn't just a transaction; it's a financial checkpoint. It's the perfect time to reassess your overall financial health.

  • Need to extend your amortization? If the payment shock is too severe, we can look at stretching your amortization back out to its original length to lower the monthly payment.

  • Have high-interest debt? We could roll expensive credit card or car loan debt into your new, lower-rate mortgage, freeing up significant monthly cash flow.

Your home is your biggest asset, but your mortgage is your biggest liability. Your renewal is your chance to ensure it’s structured to support your life, not strain it. Let’s start the conversation 4-6 months before your renewal date to build a plan that gives you security and peace of mind.

Let's connect!

Ready to discuss your home ownership goals and a Better Mortgage by Dom?

 

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