As we move through 2025, mortgage holders in British Columbia and Alberta are facing a critical moment. The Bank of Canada (BoC) has held its overnight lending rate steady at 2.75% in its June 2025 announcement, signaling a mid-year pause as it evaluates inflation progress and global economic risks. While this may bring a sense of stability, it also places pressure on the growing number of borrowers set to renew their fixed-rate mortgages this year.
Homeowners in Abbotsford, Surrey, and Edmonton are among those most affected, with many who locked in historically low rates in 2020–21 now facing renewals at significantly higher rates. The question is: how can you navigate this new phase without experiencing payment shock?
Why the 2025 Mortgage Renewal Wave Matters
According to the latest CMHC data, more than 2 million Canadian mortgages are scheduled for renewal by the end of 2026 — with the bulk happening in 2025. For many borrowers, these renewals will be their first experience dealing with rates above 4% or 5%, a stark contrast from the sub-2% fixed rates secured during the early pandemic period.
This phenomenon, often called the “renewal cliff,” is creating financial strain across households, especially in regions with larger loan balances like the Fraser Valley and Greater Edmonton Area.
The BoC’s Mid‑2025 Pause: What It Means for You
The BoC’s decision to hold rates steady in June reflects mixed economic signals: a slowing housing market, tempered consumer spending, and inflation trending close to its 2% target. This pause, while not yet a rate cut, gives borrowers an important window of opportunity to reassess their mortgage terms — rather than blindly accepting an auto-renewal at higher costs.
At this point in the year, locking in a new term or switching lenders could result in thousands in savings, especially if rates begin to fall later in 2025 as some economists anticipate.
Common Mistakes to Avoid at Renewal Time
Mortgage renewal is more than a formality. Yet, many homeowners simply sign their lender’s renewal offer without comparing rates or terms. This approach can cost you heavily over time.
Here are five mistakes to avoid:
- Automatically accepting the offer from your existing lender
- Failing to compare lenders in a changing rate environment
- Overlooking term flexibility — e.g., opting for 1- or 2-year terms instead of 5
- Ignoring amortization changes that could help with affordability
- Skipping a refinance analysis — especially if you’ve built up equity
Smart Mortgage Renewal Strategies in a High-Rate Climate
- Reassess Before You Renew
Use this period of BoC rate pause to review your finances and long-term goals. If your income or debt situation has changed, a new mortgage strategy may be warranted.
Related reading: Refinancing in a Lower-Rate Environment: Is Now the Right Time for BC Homeowners?
- Negotiate More Than Just the Rate
Many borrowers focus solely on the rate — but you should also negotiate:
- Prepayment privileges
- Portability options
- Penalty clauses
- Flexibility on lump sum contributions
Your mortgage is a tool — and terms matter just as much as rates.
- Consider Shorter Terms
Instead of locking into a 5-year fixed, many 2025 borrowers are choosing 1- to 3-year fixed rates. This provides some payment certainty now, with the option to renew at lower rates if BoC starts cutting later this year or in 2026.
Related blog: Fixed vs Variable Rate Mortgages: Making the Right Choice During Economic Uncertainty
- Explore Amortization Adjustments
For those facing affordability concerns, stretching your amortization period (e.g., from 20 to 30 years) can significantly reduce monthly payments. While it means more interest over time, it can create breathing room during tight periods.
Learn more in: The Rise of 30-Year Amortization for First-Time Buyers in BC
- Use Your Equity Strategically
If your home has appreciated, you might qualify for a refinance or a home equity line of credit (HELOC). This can be useful for:
- Debt consolidation
- Renovation funding
- Tuition costs or investment capital
Related resource: Line of Credit Options in Surrey
- Work With an Independent Mortgage Broker
Mortgage brokers like Sandhu & Sran Mortgages are not tied to any one lender — giving you access to a wide range of competitive options. From major banks to credit unions and alternative lenders, brokers can help you:
- Navigate renewal letters
- Shop for better rates
- Refinance or switch lenders
- Access private mortgage solutions if needed
Our team serves homeowners across Abbotsford, Surrey, and Edmonton, and we make sure every renewal decision aligns with your financial reality — not just lender convenience.
- Consider Alternative and Private Lenders
If your financial profile doesn’t meet traditional banks’ criteria — perhaps due to self-employment or non-traditional income — private or alternative lenders could help.
At Sandhu & Sran Mortgages, we regularly assist clients with:
- Private mortgage solutions
- Bridge loans for urgent renewals
- Custom terms without traditional stress tests
Learn more about these options in our Private Mortgages in Surrey section.
- Leverage Online Mortgage Tools
Before making decisions, use helpful tools like:
These can help you model different payment scenarios, especially if you’re considering increasing amortization or accessing equity.
- Bundle Renewal With Debt Consolidation
If you’re juggling credit card debt, personal loans, or vehicle payments, consolidating your debts into a new mortgage term at renewal can simplify your finances. You’ll:
- Pay a single, lower-interest monthly amount
- Potentially improve your credit utilization ratio
- Regain breathing room in your monthly cash flow
Regional Insight: Why Local Strategy Matters
Abbotsford:
Renewals are hitting local families hard, especially those who bought at pandemic peaks. We help clients evaluate whether switching lenders or adjusting terms makes sense before signing.
Surrey:
As one of BC’s fastest-growing areas, Surrey residents are balancing rising housing costs with family planning and business investments. Our tailored approach helps structure renewals for both affordability and flexibility.
Edmonton:
In Alberta, more borrowers are turning to variable-rate or shorter-term renewals to stay agile in a shifting rate environment. We provide refinancing guidance that reflects local market dynamics.
Frequently Asked Questions (FAQs)
Q1. Is it a good idea to switch lenders during renewal?
Yes — especially if your existing lender is offering uncompetitive rates or rigid terms. Mortgage brokers can help you shop around without major penalties during renewal.
Q2. Will rates go down in late 2025 or 2026?
While the Bank of Canada has paused further increases, many economists predict modest rate cuts in late 2025. However, timing and magnitude are uncertain, so shorter terms may provide flexibility.
Q3. What if I can’t afford my new payments?
You may be able to adjust your amortization, refinance with a different lender, or explore private mortgage options. Don’t delay — speak to a broker before renewal.
Q4. Does refinancing during renewal incur a penalty?
No penalty applies if you refinance at renewal. If you break your mortgage before maturity, a penalty might apply — but could still be worth it depending on your new rate and term.
Q5. Are there government incentives or tax credits for renewals?
While direct incentives for renewals are rare, you may still benefit from HELOC flexibility, the First-Time Home Buyer Incentive (if applicable), or energy-efficient home upgrade credits when refinancing.
Final Word: Don’t Let the Lender Lead Your Renewal
2025 is not the year to accept default offers from your lender without review. Use this mid-year BoC rate pause as a strategic window. Whether you’re in Abbotsford, Surrey, or Edmonton, a smart renewal can be a powerful financial reset.
With Sandhu & Sran Mortgages, you’re not alone. We’ll help you:
- Review renewal letters
- Compare lenders and rates
- Refinance or restructure terms
- Navigate unique property, income, or credit challenges