High interest rates concerning homeowners with mortgage renewals coming up: survey

Homeowners with mortgages coming up for renewal in the next year or so are already thinking about how much more they’ll have to pay a month.

A new survey from Royal LePage shows that with rising interest rates, more than three quarters of those mortgage holders are concerned. The survey also noted that 31 per cent of Canadians with a fixed mortgage are up for renewal within the next 18 months.

Hannah Kroeker has two mortgages between her and her partner.

“We each own a property and we both have favourable interest rates,” she said.

However, she has concerns that the rates won’t be as favourable when she has to renew in 2025.

“I’m quite worried, just based on what the interest rates are now. If it’s going to be anything similar to that, it’s a little bit scary.”

The Bank of Canada has raised its key lending rate several times since March 2022 to help curb inflation. The rate is now at five per cent.

Chris Pennycook with Royal LePage said those higher rates mean more people are starting to shop around come renewal time to get the best possible deal.

“They’re all looking at it and they’re certainly investigating where their payments are going to be and what they’re going to have to be at in the future,” said Pennycook.

He notes household budgets are going to have to adjust.

“We’re not looking at defaults coming our way, we’re just looking at a little more stress in what they’re finances are because they’re obviously looking at increased payments.”

The Credit Counselling Society says now is the time for those concerned homeowners to start cutting back on non-essentials.

“So eating out, entertainment. Any of the fun we have in our budgets,” said Sandra Fry with the society.

For Kroeker, if things become unmanageable, should said she would consider consolidating the two properties with her partner.

“If it goes up too much, the monthly payments are out of what we’re comfortable paying, then I guess we’ll look to sell,” said Kroeker.

The Bank of Canada held the rate at five per cent this week and the next rate announcement is expected Dec. 6, 2023.