Is a Mortgage Crisis Coming to Canada in 2025? Here’s What You Need to Know

If you’ve been watching the news—or even just chatting with friends—you’ve probably heard some whispers (or full-on panic) about a possible mortgage crisis in Canada.

So… is it true? Should you be worried?

Let’s clear the air and give you the real facts about what’s happening in the mortgage world as we enter the second half of 2025—and what it means for you.

📉 Where Are Interest Rates Now?

After years of aggressive interest rate hikes to tame inflation, the Bank of Canada has finally shifted gears in 2025.

✅ The overnight rate now sits at 2.75%, down from the peak of 5.00% we saw in 2023.

✅ Economists predict we could see one or two more cuts before the end of the year—potentially bringing the rate closer to 2.25%.

This is good news for both variable-rate mortgage holders and those with upcoming renewals. But it’s not an instant fix.

What’s Happening with Mortgage Rates?

• 5-year fixed mortgage rates are now hovering between 4.0% and 4.5%—down from last year’s highs but still higher than the ultra-low rates many Canadians secured during the pandemic.

• Variable rates are slowly decreasing as well but remain slightly higher than fixed rates for now.

The key takeaway? Rates are heading in the right direction, but borrowers coming off ultra-low pandemic mortgages will still feel a payment shock.

The Mortgage Renewal Crunch

Here’s where the real pressure is building:Nearly 60% of Canadian homeowners are facing mortgage renewals between now and the end of 2026. Many of these homeowners originally locked in rates as low as 1.5% to 2.5%.

Fast forward to today:Even with rates coming down, most renewals are landing around 4%+, meaning monthly payments are jumping—often by hundreds or even thousands of dollars.

Is This the Start of a Mortgage Crisis?

The short answer? No.

Here’s why:

• ✅ All borrowers were stress-tested at higher rates when they first took out their mortgages—meaning they had to qualify as if rates were already higher.

• ✅ Mortgage delinquency rates remain incredibly low, sitting around 0.17% nationally (historically low).

• ✅ Canada’s banking system remains one of the strongest in the world.

Yes, it’s tougher out there. Yes, some households are feeling stretched. But the fundamentals don’t suggest a market-wide crisis like we saw in the U.S. back in 2008.

What Should You Do If You Have a Mortgage Coming Up?

If your renewal is anywhere within the next 6 to 18 months, the most important thing you can do right now is plan ahead.

Here’s how:

1. Start early: Don’t wait until you get that renewal letter from the bank. You may have better options elsewhere.

2. Know your numbers: Use an updated mortgage calculator to see what your new payments could look like.

3. Explore strategies: Consider options like blending and extending, early renewal, or even switching lenders.

4. Speak to a pro: Mortgage brokers (like Swivel Mortgage Group) have access to more products, more lenders, and more strategies than the big banks alone.

The Bottom Line

We’re not heading for a mortgage meltdown, but we are navigating a period of adjustment.Rates are coming down—slowly—but many Canadians will still face higher payments than they’re used to.

The good news? With the right advice and proactive planning, most homeowners can manage this transition successfully.

👉 Need help with your mortgage renewal or a new purchase?

Reach out to Swivel Mortgage Group for a free mortgage consultation. We’ll help you make sense of the numbers and build a plan that works for you.