Homeowners to Curb Spending Amid Rising Mortgage Renewals, Says TD
Nearly half of Canadian homeowners face higher mortgage payments this year, prompting major budget overhauls and increased interest in fixed-rate options.
Homeowners across Canada are bracing for higher mortgage payments as nearly half of those facing renewal within the next year anticipate an increase in their monthly costs. According to a recent survey, this looming rise in housing expenses is prompting many Canadians to reconsider their household budgets and make significant adjustments to their spending habits.
The survey, conducted in mid-April, reveals that 57 per cent of homeowners expect their upcoming mortgage renewal to have a notable impact on their living situation. Among those individuals, a substantial 73 per cent say they will be compelled to cut back on personal expenditures to manage the financial strain. The findings come at a time when, despite recent reductions in the Bank of Canada’s benchmark interest rate, borrowing costs remain considerably higher than they were prior to 2022.
As Canadians prepare for these changes, nearly a quarter of the 890 homeowners surveyed who are on the cusp of mortgage renewal admitted that they'll need to revisit and adjust their overall financial approaches. Sacrifices are already being planned: 43 per cent said they intend to put home renovations on hold, and 29 per cent are considering downsizing their living arrangements to decrease expenses. Alternative measures—such as moving in with a roommate or relocating to more affordable neighborhoods—are also gaining traction among those seeking ways to mitigate increased housing costs.
There also appears to be a shift in mortgage preferences, with a decisive majority favoring fixed rates over variable ones during this period of financial uncertainty. Three-quarters of homeowners surveyed indicated they are leaning toward securing a fixed-rate mortgage at renewal, seeking the predictability and stability that such mortgages offer amidst fluctuating rates and ongoing economic challenges.
This widespread anticipation of higher mortgage payments underscores the continuing challenges for Canadian households, even as policymakers attempt to ease economic pressures. For many, adapting to these new realities means making difficult choices—and watching their budgets more closely than ever before.
