Mortgage renewals at double rates squeeze 45% of Canadian budgets

Nearly half of Canadian homeowners who renewed their mortgage since January 2025 now put at least half of their monthly household budget toward housing, as rates run about double the five-year fixed deals signed during the pandemic.

"Many homeowners in Canada are pretty much living pay cheque to pay cheque with most of their cash flow going toward housing," said Victor Tran, a mortgage and real estate expert at Rates.ca.

The Rates.ca survey found 45 percent of Canadians who renewed since January 2025 say housing consumes half or more of their monthly household budget. The most financially pinched are younger owners: 56 percent of respondents aged 18 to 34 report their mortgage takes as much as 70 percent of monthly income.

The squeeze is sharpest in Canada's priciest markets. Benchmark single-family prices in the Greater Toronto Area have fallen to about $1.1 million from a record above $1.5 million in 2021, while benchmark condominiums dropped to about $535,000 from roughly $730,000, Canadian Real Estate Association statistics show. Falling values leave some borrowers without enough equity to refinance, Tran said.

"I can't even count how many deals have been lost due to lower home values," he said.

Edmonton's stable prices ease the squeeze

Edmonton homeowners face a milder version of the same problem because prices have held up. The benchmark single-family home in the city was about $510,000 in July, up from about $424,000 in 2021, and benchmark condominiums rose to about $200,000 from $177,000.

Those gains give borrowers room to stretch out amortization and keep payments near current levels, said Marc Crossman, a mortgage broker at Tango Financial Mortgage in Edmonton.

"Many clients have also increased other debts with high card balances," Crossman said. Those borrowers can often refinance, rolling high-interest debt into a home equity line of credit at a significantly lower rate.

"A refinance may serve as a budget pressure release valve," he said.

Refinancing can cut monthly payments

Crossman said even homeowners who refinance to extend amortization and roll in tens of thousands of dollars of high-interest debt may ultimately reduce their monthly payments.

"We can get them in a situation where clients are actually ahead after doing some financial planning and budgeting versus focusing only on getting the best rate," he said.

Refinancing is not automatic. Borrowers must requalify and pay for appraisals and related services, and those whose home values have fallen may lack the equity to qualify at all, Tran said. In Edmonton, where prices have risen, more owners clear that hurdle.

The Toronto-Edmonton contrast shows how local price trends shape renewal outcomes. Owners who bought near the 2021 peak in high-priced markets face both higher renewal rates and shrinking equity, while those in cities with stable prices keep more options to manage the payment shock. For younger borrowers carrying the heaviest housing burden, the choice between extending amortization, consolidating debt, or selling will hinge on how long rates stay elevated.

Figures reflect the Rates.ca survey and Canadian Real Estate Association data as of the reporting date; borrowers should verify current rates and rules against the latest official announcements before acting.

This article is for informational reference only and does not constitute professional advice.