As we move deeper into 2025, a wave of mortgage renewals is sweeping across Canada—and homeowners in Abbotsford, Surrey, and surrounding areas are right in the thick of it. According to recent projections, over $315 billion in Canadian mortgages are set to renew this year, many of which originated during the historically low interest rate era of 2020 and 2021.
But as homeowners approach renewal, they’re facing a very different financial environment. Interest rates have climbed significantly from pandemic lows, and although the Bank of Canada paused further cuts in April 2025, today’s rates remain well above what many borrowers are used to. The result? Monthly payments for renewed mortgages are expected to increase by 20% to 40% in some cases, leading to what analysts are calling “renewal shock.”
For homeowners in the Fraser Valley, where property values remain high and household budgets are stretched, managing this transition is critical. This blog breaks down why renewals are more expensive in 2025, what options homeowners have, and how to navigate this change without falling into financial distress.
Why Mortgage Renewals Are More Expensive in 2025
The Rate Gap
Many homeowners locked into fixed mortgage rates between 1.5% and 2.5% during the pandemic. Today, renewal offers from lenders are averaging between 3.9% and 4.5%, depending on term, product type, and credit profile. This increase may seem modest at a glance—but over the life of a mortgage, it has serious implications.
For example:
A $600,000 mortgage renewed at 2.0% over 25 years results in a monthly payment of approx. $2,540.
At 4.4%, that payment jumps to around $3,280—a $740 increase each month.
What’s Driving the Increase?
- Bank of Canada policy rate: While it now sits at 2.75%, it’s still far from the pandemic low of 0.25%.
- Bond yields and lender funding costs: These have stabilized but remain elevated.
- Lender risk management: With inflation, arrears, and housing affordability concerns, banks are pricing more cautiously.
Local Impact: Abbotsford and Surrey in Focus
In markets like Abbotsford and Surrey, many households are dealing with larger-than-average mortgages due to higher property values. This makes them especially vulnerable to renewal-related payment increases.
- Abbotsford: With average detached home prices near $960,000, even modest rate hikes on a $700,000 mortgage renewal can significantly affect monthly expenses.
- Surrey: As one of the fastest-growing cities in B.C., Surrey saw a surge in home buying during the pandemic. Many recent buyers are now facing their first renewal, and their budgets are being tested.
For families with children, self-employed income, or single-income households, absorbing a $500–$800 increase in monthly housing costs requires planning—not panic.
The Psychology of Payment Shock
The challenge of mortgage renewal isn’t just financial—it’s psychological. Many homeowners are experiencing what financial planners refer to as “payment shock”: the emotional and behavioral stress that comes with sudden increases in major recurring expenses.
In a recent survey, over 80% of Canadian homeowners renewing in 2025 said they expected financial strain, and nearly half expressed concern about their ability to meet new payment obligations without lifestyle adjustments.
Step-by-Step Strategy to Navigate Renewal in 2025
The good news: homeowners have more tools and options than they realize. Here’s how to prepare, evaluate, and adapt during renewal:
- Start Early—Ideally 4 to 6 Months in Advance
Most lenders allow early renewals within 120 to 180 days of term expiry. This gives borrowers a chance to:
- Lock in a rate in advance
- Negotiate with their current lender
- Compare offers from other institutions
- Get a Mortgage Review from a Broker
An independent mortgage advisor can:
- Assess your qualification at current stress test levels
- Run scenarios for fixed, variable, and hybrid options
- Identify hidden costs or restrictive clauses in lender offers
- Compare More Than Just Rates
Renewal time is a good opportunity to assess:
- Amortization flexibility: Can you extend to reduce payments?
- Prepayment privileges: Can you pay down faster when rates drop?
- Penalties for future changes: Are variable rate break fees more favourable?
- Explore Shorter-Term Fixed Rates
In a market where rates may still fall later in the year, a 1- or 2-year fixed can offer a lower rate with more flexibility than a 5-year commitment.
- Consider Variable or Hybrid Options
While variable rates involve some risk, they may benefit borrowers if further BoC cuts occur. Hybrid (split) mortgages can combine the best of both worlds.
- Adjust Your Budget Proactively
Don’t wait for higher payments to disrupt your finances. Reduce discretionary expenses, automate savings, and prepare a buffer.
Refinancing vs. Renewing: Know the Difference
If you’re only changing the term with your current lender, that’s a renewal. But if you’re:
- Switching lenders
- Changing amortization
- Tapping equity
- Consolidating debt
…you’re entering refinance territory, which requires a full requalification under current stress test rules.
For some homeowners, refinancing may be necessary to improve affordability—even if it means extending amortization or paying a small penalty.
Who Is Most at Risk?
- Homeowners who bought at peak prices with minimal down payments
- Borrowers with variable income or recent job changes
- Households carrying high credit card or unsecured debt
- Those who haven’t reviewed their mortgage documents in years
If you fall into one of these groups, a professional mortgage consultation is more than helpful—it may be essential.
Tools to Manage Renewal Without the Panic
For homeowners in Abbotsford, Surrey, and nearby areas, navigating a mortgage renewal in 2025 doesn’t need to be overwhelming. With the right tools, insights, and planning, it’s possible to mitigate the impact of rising payments and regain control of your financial strategy.
Key Tools to Use:
- Mortgage Renewal Calculator:
Run different rate and term scenarios to understand your future payments and affordability levels. - Amortization Adjuster:
Extending your amortization back to 30 years (if allowable) can reduce monthly payments and create short-term relief. - Rate Hold Pre-Approvals:
Many lenders allow you to lock in a rate up to 120 days before renewal. This helps protect you from market increases while you compare offers. - Mortgage Porting and Blending Options:
If you’re moving or breaking your term early, ask about porting your existing rate or blending with a new one to avoid penalties. - Home Equity Line of Credit (HELOC):
For those with sufficient equity, a HELOC can provide a liquidity buffer to help smooth out monthly expenses during tight periods.
Frequently Asked Questions (FAQs)
Q1: How much can my payment really increase in 2025?
If your previous rate was around 2% and your new rate is 4.5%, your monthly payment could rise by 20% to 40%, depending on your loan amount and remaining amortization.
Q2: Should I go with a fixed or variable rate at renewal?
It depends on your risk tolerance. A fixed rate offers stability and is a good choice if your budget is tight. A variable rate may offer savings if the BoC cuts rates again, but comes with potential fluctuations. Some homeowners are opting for short-term fixed (1–3 years) to keep options open.
Q3: Is refinancing better than renewing?
Refinancing gives you the opportunity to extend amortization, access equity, or consolidate debt—but it requires full requalification and may involve penalties. If you’re simply continuing with your current term and lender, a renewal is simpler and may not require a full application.
Q4: Can I switch lenders at renewal without penalty?
Yes, if your mortgage term is complete, you can switch lenders without a penalty. However, switching may involve new documentation, appraisal, and qualification under current stress test rules.
Q5: What if I can’t afford my new payment?
Contact your mortgage professional or lender immediately. Many lenders offer payment deferrals, re-amortization, or interest-only periods for qualified borrowers facing short-term hardship.
Q6: Does renewing my mortgage require a credit check?
Not always. If you’re renewing with your existing lender and not changing terms significantly, they may waive a new credit check. However, switching lenders or refinancing will require full credit assessment.
Q7: Can I increase my amortization to reduce my payment?
Yes, in many cases. Extending amortization to 30 years (if you have less than 20% equity, even 25 years may apply) can reduce your monthly obligation, giving you more breathing room.
Real-World Example: Renewal Impact in Surrey
Let’s take a typical case from Surrey:
- Original Mortgage: $650,000
- Term End: March 2025
- Old Rate: 2.19% (5-year fixed)
- New Rate: 4.29% (5-year fixed)
Payment at Old Rate: ~$2,825/month
Payment at New Rate: ~$3,502/month
That’s a $677/month increase—or over $8,000 more per year in housing costs. For many families, this requires serious financial adjustment unless steps are taken to refinance, adjust amortization, or reduce other obligations.
Advice for Homeowners in Abbotsford & Fraser Valley
In Abbotsford, many homeowners took advantage of lower property prices compared to Metro Vancouver and bought during the 2020–2022 window. These families are now facing their first major renewal.
Key moves to consider:
- Lock in early: If rates rise again in June or beyond, current fixed offers may disappear.
- Ask about flexible payment structures: Some lenders offer stepped-up payment options or skip-a-payment flexibility.
- Work with a broker: With access to more lenders and products, a broker can often offer better solutions than a single bank.
Final Thoughts
Mortgage renewals in 2025 are shaping up to be one of the most financially significant events in many homeowners’ lives. But renewal doesn’t have to mean risk—with proactive planning, the right financial tools, and local market awareness, it can be an opportunity to restructure your mortgage around your evolving needs.
Whether you’re in Abbotsford, Surrey, Langley, or Edmonton, the key is to approach renewal with information, not assumption. Don’t wait for the renewal notice in the mail—start reviewing your options now and consult with a mortgage expert who can guide you through the numbers, terms, and opportunities that make the most sense for your household.