Almost nobody is talking about the Renewalageddon in Canada.
60% of mortgages are set to renew in 2026. Unlike the US, where mortgage terms can be up to 30 years fixed, the overwhelming majority of mortgage interest terms are 5 years or less, fixed or variable rate.
Variable rate mortgages have survived with similar payments so far because they stretched amortizations to 50 years, but the CMHC (canadian home mortgage corporation) is not allowing them to renew at those amortizations, so payments will rise more than the amount of the mortgage increase would imply.
Fixed rate mortgages will be renewing at rates going from as low as 0.99% if renewed at trough mortgage rates for 5 years to 4-6%, which is going to massively increase house payments for millions of Canadians.
For a sanely priced house (200-400k), that might be painful but managable. House prices in Canada peaked around 2021 at over 830k, and on a mortgage that big, moving from 1% to 4-6% will mean huge increases in monthly payments.
Mathematically, it looks like we're facing one of the biggest financial crises in Canadian history and even though it's operating like clockwork, nobody is talking about it.
60% of mortgages are set to renew in 2026. Unlike the US, where mortgage terms can be up to 30 years fixed, the overwhelming majority of mortgage interest terms are 5 years or less, fixed or variable rate.
Variable rate mortgages have survived with similar payments so far because they stretched amortizations to 50 years, but the CMHC (canadian home mortgage corporation) is not allowing them to renew at those amortizations, so payments will rise more than the amount of the mortgage increase would imply.
Fixed rate mortgages will be renewing at rates going from as low as 0.99% if renewed at trough mortgage rates for 5 years to 4-6%, which is going to massively increase house payments for millions of Canadians.
For a sanely priced house (200-400k), that might be painful but managable. House prices in Canada peaked around 2021 at over 830k, and on a mortgage that big, moving from 1% to 4-6% will mean huge increases in monthly payments.
Mathematically, it looks like we're facing one of the biggest financial crises in Canadian history and even though it's operating like clockwork, nobody is talking about it.
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