Facing Renewal Shock? Here’s What to Know About Rising Mortgage Payments

If you’ve been paying attention to the mortgage market, you might have noticed some headlines that could send a chill down any homeowner’s spine. RBC recently made waves with the projection that mortgage clients renewing in 2025 could face an average $513 monthly payment increase. That’s not just a bump—it’s a leap.

This isn’t exclusive to RBC clients; it’s a reality check for all homeowners whose mortgages are coming up for renewal in the next few years. Here’s what’s going on and what you can do to prepare.

Why the Big Jump?

The answer lies in interest rates. Many homeowners locked in ultra-low rates during the pandemic. As those terms expire, they’re being replaced with rates that reflect today’s higher borrowing costs. For many, this means recalibrating their budgets to account for significantly higher payments.

How Does This Impact You?

Whether your mortgage is with RBC, another big bank, or an independent lender, the numbers might look different, but the overall trend is the same: Payments are increasing across the board. For some, this might mean dipping into savings, cutting discretionary spending, or even considering refinancing options to ease the transition.

Steps to Take Now

Instead of letting renewal shock catch you off guard, consider these proactive steps:

1. Understand Your Renewal Date - Dig up your paperwork or call your lender to confirm when your term is up. Knowing your timeline is half the battle.
2. Get Pre-Approved Early - It’s never too soon to see what rates you qualify for. Pre-approvals give you an idea of what to expect and lock in a rate for a set period.
   • Here are some handy mortgage calculators to help with the process!
3. Explore Your Options - Mortgage renewals are an opportunity, not a mandate. You don’t have to stick with your current lender if a competitor offers a better deal.
4. Talk to a Broker - A mortgage broker can shop around for you, ensuring you get the best rate and terms. They can also help you explore creative solutions, like extending your amortization to lower monthly payments (though that has trade-offs).

Don’t Panic—Plan

Higher payments are stressful, but they don’t have to be catastrophic. With the right preparation, you can manage the increase and come out stronger on the other side.

The key takeaway? Whether it’s $513 or another figure, don’t wait for your renewal letter to take action. Get ahead of the curve, explore your options, and make a plan that works for your financial goals.

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