In the ever-evolving landscape of personal finance, few decisions hold as much weight as those concerning our homes. For many, a mortgage is the cornerstone of their financial journey, representing a long-term commitment to both a property and a financial institution. However, as economic tides ebb and flow, so do the opportunities that come with them. In terms of renewing your mortgage, this can include taking advantage of lower rates or changing your amortization schedule. However, with mortgage rates currently at a 15-year high, renewing can be stressful.

So, if your mortgage is up for renewal, how much are you likely to end up paying? To find out, we analyzed mortgage payments on homes purchased in 2020 and 2018 to learn how much buyers have left to repay, and what their payments may be when they renew. 

2020 Buyers Hit Hardest With 4% Rate Increase Affecting Renewal

2020 buyers that are up for renewal will likely be impacted by higher rates. One of the best available rates in September 2020 was 1.64% – renewing now means paying interest at a rate of 5.24%. Additionally, 2020 buyers have had two fewer years to make payments towards their principal, meaning there’s greater interest on top of the larger percentage of the original home price. The average rate in September 2018 was 3.09%, so although rates have increased, the disparity isn’t quite as significant as those that locked in 2020 rates.

Vancouver buyers, for example, may be paying the most out of the 2020 buyers. Anyone who bought a home for the average price in September 2020 of $955,000 may have paid off a little under $100,000 towards the principal, with average monthly mortgage payments of $3,737 for the past three years. Anyone renewing now will be paying an average of $4,946 monthly, nearly $1,200 more, higher than any other city on our list. 2018 Vancouver buyers are the only group on our list paying over $4,000 a month, with an average monthly mortgage payment of $4,839, $324 higher than their original payment of $4,515. 

Toronto is the only other city where 2020 homebuyers will be paying over $4,000 on their average mortgage payments. Payments will now amount to an average of $4,499 a month, $1101 more than their original payments. 2018 buyers will only see an increase of $257 on their average monthly payments, going from $3,516 to $3,773. 

Monthly Mortgage Payments Vary Across Canada

The smaller the mortgage amount, the more affordable the monthly payments are, like for the most affordable cities on our list: Moncton and Saint John. 2020 home buyers in Saint John may see their mortgage payments go from $794 a month to $1,047, an increase of $253. 2018 buyers in the same city may only be paying $55 more on their monthly mortgage payments, going from $828 to $883. 

Moncton homeowners who bought in 2020 may be paying an extra $262, with their monthly mortgage payments now at $1,080, while those who bought in 2018 may only be paying an extra $53, with their monthly payments hitting around $842. Anyone who bought a home in 2018 in Quebec, St. John’s, Winnipeg or Regina may have an increase of less than $100 on their average monthly mortgage payments if they were to renew now. 

Zoocasa (Daniel Crook, October 31,2023)