5 Mortgage Myths That Could Cost You Big in 2025

Thinking about buying, renewing, or refinancing a mortgage this year? With rapidly shifting rates, stress-test changes, and intense lender competition, acting on outdated advice can be costly. Here are five myths that could derail your financial plans—debunked, with what you should know instead.

Myth #1: The Lowest Rate Is Always the Best

Think the lowest advertised rate is the one you should take? Think again.

What it misses: The mortgage rate is just one factor—terms and features matter too. Lower rates often come with stricter restrictions or penalty-heavy clauses.

What smart borrowers do: Look beyond the rate. Assess prepayment privileges, portability, blend options, and out-of-pocket fees. A slightly higher rate with flexible terms can save you more down the road .

Myth #2: Ignoring Renewal Offers Is OK—It’s Easier

If you're renewed every few years, taking the first offer from your bank may be tempting. But that can be expensive.

Reality check: Brokers see rate differences of up to 0.5% between banks and alternative lenders at renewal .

Be proactive: Shop around or work with a broker—55% of mortgages renew between 2025–2026 . Even a small discount can save thousands over the next term.

Myth #3: Rate Cuts Hurt Fixed-Rate Mortgages

Some believe that when the Bank of Canada (BoC) cuts rates, fixed-rate mortgages suddenly lose value.

Truth is: Fixed rates are tied to bond yields, not directly to the BoC’s policy rate.

What matters: Bond markets often anticipate rate moves earlier than fixed mortgage rates reflect. You may still secure low fixed rates before or shortly after a rate cut.

Myth #4: Pre-Approval Guarantees Your Mortgage

A pre-approval is helpful, but not a guarantee.

Beware: Lenders base pre-approval on current income, credit, and debts. A job change, spending spree, or credit inquiry can shift those numbers.

Stay qualified: Keep your finances steady—avoid major purchases, maintain employment, and hold off on new credit until your mortgage closes.

Myth #5: You Need a 20% Down Payment

Many believe 20% down is non-negotiable.

The truth: In Canada, you can qualify with as little as 5% down — thanks to mortgage insurance.

What to consider: Less down means mortgage insurance and higher payments—but also gets you into a home sooner. Structure your payment plan smartly, and down the line, consider a larger prepayment or lump-sum option.

📈 Why It Matters in 2025

• The BoC is likely to make 2–3 rate cuts by year-end, potentially improving affordability.

• 2+ million mortgages are renewing by 2026—a real opportunity to save if handled right.

• The most successful homeowners in 2025 are those who review their mortgage strategy annually — not just at renewal

✅ What You Should Do Right Now

👋 Need Help Choosing Wisely?

Whether you’re renewing, refinancing, or buying: we can help you strip away the myths and build a mortgage plan that works for your goals and life. No fluff—just smart, practical advice.

📞 Book a free ‘Myth Check’ mortgage call today: 647-794-7676

Or reach out info@swivelmortgage.ca