A new report from TD Bank says Canadians renewing their mortgages may feel the financial pinch—but most will be able to weather the storm.
Economist Maria Solovieva notes that many households who locked in ultra-low mortgage rates in 2020 are now facing significantly higher payments as they renew at today’s elevated rates. While this will squeeze budgets, TD says most borrowers will still be able to manage their payments, though with less room for discretionary spending.
At the same time, there’s a silver lining. Canadians who took on short-term mortgages last year—when rates were near their peak—are now renewing at lower rates, which could actually reduce their monthly payments.
As a result, the report finds that overall mortgage payments in Canada are trending downward for now, thanks to easing long-term rates.
However, the outlook isn’t entirely rosy. Solovieva warns that non-mortgage debt is becoming a concern, with delinquency rates rising among borrowers carrying other forms of credit.
Still, as long as interest rates continue to decline, TD believes that mortgage costs will stay within a manageable range for most Canadian households.