A large

mortgage renewal wave

is approaching, with many homeowners facing a tougher financial road ahead than others, a report by TD Economics says.

“About 60 per cent of outstanding mortgages will renew by the end of 2026, and 40 per cent are expected to renew at higher rates,” Maria Solovieva, an economist at TD Economics, said in a note, citing a report from the Bank of Canada.

She said those households in the 40 per cent group “are most likely to face payment increases,” with mortgage renewals expected to peak in the final quarter of 2025 and the first quarter of 2026.

A homeowner who locked into a five-year, fixed-rate mortgage of $500,000 at 2.5 per cent in 2020 will be renewing at closer to four per cent, meaning their payment will rise by $320 a month, Solovieva said.

Mortgage holders in “the early relief group” — those who will benefit the quickest from falling

interest rates

— typically hold variable-rate mortgages and short-term ones rather than the more standard five-year fixed-rate option.

“These borrowers tend to carry above-average balances,” but wind up seeing their mortgage payments drop significantly when they renew, Solovieva said. For example, someone with a $1-million mortgage at a one-year term at a 5.9 per cent rate will, upon renewal, have a monthly mortgage payment that is “a whopping $1,480 lower.”

Another segment of borrowers who jumped into the housing market when interest rates were on the way up may get higher or lower rates depending on when they renew and their original rate.

The looming wave of renewals has been characterized as a mortgage “shock,” but Solovieva said some of the shock factor has abated.

For those who will be paying more for their mortgages, “financial conditions have improved even for this group,” she said, adding that

homeowners

can tap into their home equity, given that the national

home price

index is up 25 per cent since 2020.

“We do know that people are still renewing at higher rates, but we think people will manage,” Solovieva said. “That’s what the bottom line is.”

Overall, she said people are wealthier than they used to be, with assets up 45 per cent, including a 42 per cent increase in more liquid deposits since 2020, while average personal disposable income is up 27 per cent.

“These facts suggest that many homeowners have some flexibility to temper the increase in their monthly payment, whether it’s through extending the amortization, refinancing or prepaying,” she said.

Prepaying involves putting down a lump sum on the mortgage to reduce the principal amount owed.

Of course, some people will still experience economic strain, especially those who are unemployed or have sustained a hit to their income.

TD Economics is calling for the unemployment rate to rise to 7.3 per cent at the end of the year, coinciding with a heavy mortgage renewal period.

But looking at the country as a whole, Solovieva said the mortgage burden is starting to ease.

“The downward trend in aggregate mortgage payments is likely to continue through the end of 2025,” she said, adding that mortgage-service costs should continue dropping through to the end of the year, but will remain above 2019 levels.

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Billionaire mining entrepreneur Robert Friedland welcomed United States President Donald Trump’s vow to impose a 50 per cent tariff on copper imports, arguing that domestic production of the metal was “fundamental to America’s national security.”

Analysts and other executives have questioned the logic of imposing such a high levy when the U.S. remained so dependent on imports of the metal, but the founder of Toronto-listed Ivanhoe Mines Ltd. said the move was needed to “wake people up” to America’s vulnerability. — Financial Times

Read the full story here.

  • Today Data: Statistics Canada releases job numbers for June. The United States Treasury releases the federal budget balance
  • Earnings: MTY Food Group Inc., Battery Mineral Resources Corp.

 

  • Trump says U.S. will impose 35% tariff on Canadian goods starting August 1
  • Cottage owners stuck in paradise as market slams to a standstill
  • The Trudeau legislation Canada’s oilpatch hates — and what Carney is doing about it

Pets offer joy and companionship, but ownership can be a significant financial commitment. It is important to balance care costs for our furry, scaly, or feathered companions with overall household income and expenses. Fortunately, there are practical steps animal lovers can take to make pet ownership more affordable while ensuring our furry friends thrive. Read more here.

Send us your summer job search stories

Financial Post published a feature on the

death of the summer job

as student unemployment reaches crisis levels. We want to hear directly from Canadians aged 15-24 about their summer job search.

Send us your story, in 50-100 words, and we’ll publish the best submissions in an upcoming edition of FP.

You can submit your story by email to

fp_economy@postmedia.com

under the subject heading “Summer job stories.” Please include your name, your age, the city and province where you reside, and a phone number to reach you.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at

wealth@postmedia.com

with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column

can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

mortgage rate page

for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s

YouTube channel

for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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  • Copper theft is getting so bad Bell Canada is sounding the alarm
  • It’s summertime and the season is ripe for a market meltdown

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