Hairline cracks are starting to appear in Canada’s mortgage renewals market, which has so far held up surprisingly well amid a sharp rise in interest rates and the economic slowdown that followed. The Canada Mortgage and Housing Corporation (CMHC) released its fall report yesterday, revealing that while mortgage delinquencies remain well below pre-pandemic levels, they are on the rise and expected to continue climbing in the coming year. This increase is largely driven by the looming renewal of almost a million mortgages. The CMHC warned that “high household debt and renewals at higher rates remain significant concerns for the Canadian economy.”
According to the report, 980,000 mortgage renewals are set for 2025. Most of these borrowers will face higher interest rates. The report notes that 85% of the fixed-rate mortgages maturing in 2025 were taken out when the Bank of Canada’s interest rate was at or below 1%. As a result, almost a million mortgage holders are expected to face renewals in 2026 at much higher rates. Could a million mortgage renewals mean a listings surge in 2025?
In the meantime, the Guelph real estate market continued its slow improvement in October as the average sale price increased slightly to $816,294. The total number of sales (144) increased by 8.5% over the previous month and homes sold for 98.8% of their asking price on average (+.7). The average price per square foot for Guelph homes increased by 3% to $467/sf but the average time on market for MLS sales also increased slightly to 22 days. Not a spectacular recovery by any means but I’m seeing some positive signs. Throw in a few more interest rate cuts and the 2025 market could have fewer mortgage delinquencies than expected.
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