Hill & Knowlton’s Royal Leprosy Survey released Thursday said 57% of Canadians will renew their primary residence mortgages this year and their monthly payments are expected to increase. Among them, 22% expect it to be “significant”, while 35% think their payments will “rise slightly”. A quarter said their monthly mortgage payments will remain roughly the same, with 15% of mortgages expected to decrease after renewal.
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Still waiting for the impact of Covid passing
Royal Lepage said it will renew 1.2 million mortgage loans in 2025. When Canadian banks’ key policy rates fell to historically lows (or below 1%), about 85% of mortgages were secured by about 85%.
“We’ve been five years now, we’ve been five years now,” Phil Soper, president and CEO of Royal Lepage, said in an interview. “While interest rates are falling rapidly, they still far outweigh those super low pandemic mortgages,” said Royal Lepage president and CEO. Loans, people are worried.”
Expectations for mortgage loans in 2025
Of those who expect their monthly payments to increase, 81% said the increase would put financial stress on families. Many of them said they would reduce their disposable spending, such as on restaurants and entertainment, or cut travel to help cope with the increase in costs. Meanwhile, 10% of respondents said they are considering scaling down, relocating to more affordable areas or renting some homes in response to higher borrowing costs.
Thorpe said the potential trade war with the United States, the Canadian economy could suffer from the damage caused by President Donald Trump’s threat to the 25% tariff increase anxiety among Canadian homeowners. However, he said Canadian banks may relax monetary policies to deal with tariffs to reduce the burden on the economy.
“We will see interest rates drop, and we have the potential to see unemployment reception,” he said. “We can see a downward trend in GDP, while at the same time, because our industry is very sensitive, we are the Pandemic Market Correction Institute. All the demands you bear… can be released based on very low borrowing costs.”
Do Canadians choose fixed or variable mortgages when updating?
While most families with ongoing renewal plans to maintain the same type of mortgage products as they do, the report says more Canadians are exploring options to sign variable rate mortgages. About two-thirds of respondents this year said they plan to get fixed-rate loans after renewal, which is three-quarters of the current fixed-rate mortgage.
About 29% said they would opt for variable interest rate loans, while there are currently 24% of variable mortgages. About 37% of respondents said they plan to get a five-year mortgage term after renewal, while 19% intend to sign for a three-year term.
