'Get a second opinion': Edmonton mortgage brokers offer advice amid rising tide of renewals

More than two million Canadians will renew their mortgages over the next year-and-a-half. CTV News asked more than 50 mortgage brokers across Canada how to get the best mortgage deal. This is what we found.

According to Canada’s national housing agency, 44 per cent of mortgages are up for renewal in 2024 and 2025 and many will face a steep rise in their payments.

“A large share of those have actually gotten their mortgages at those record low interest rates,” Canada Mortgage and Housing Corporation (CMHC) deputy chief economist Tania Bourassa-Ochoa told CTV News Edmonton.

“So there is still going to be a significant increase in interest rates and hence in their mortgage payments.”

A 15-year snapshot of interest rates in Canada shows just how much the lending environment has changed.

During the peak of the pandemic, the Bank of Canada’s key lending rate was near zero while the conventional mortgage lending rate for a five-year term hovered around the mid threes.

By April 2024, the five-year rate had nearly doubled while the bank’s rate increased tenfold.

The average monthly mortgage payment in Canada is now around $2,100.

Edmontonians are paying less – about $1,900 a month – however that is still hundreds more than a few years ago.

“There's more people looking at doing refinances right now than we've ever seen at renewals,” said Edmonton mortgage broker Cheryl Wilkes.

“Because that stretches out the lifespan of their mortgage so maybe we can access some equity and pay off some debts that may have accumulated. Things like that.”

Extending your amortization period will bring down payments however it means paying more interest in the long run.

“Yes, extending out the life does increase the overall cost of borrowing but for a lot of people right now, it's a means to an end where we're saying, ‘Hey, just get past the next few years, get rid of some of these debts. Give yourself some breathing room. And then let's talk again, when you come up for renewal in say a couple of years' time,’” said Wilkes.

Renewal trends

Bourassa-Ochoa said historically speaking Canadians have opted for five-year fixed terms but now the majority are choosing something shorter.

“The very popular option in early 2023 was very short-term, one year, two years, sometimes three years. So really, there was an expectation that interest rates would come down earlier.

“As we moved towards the end of 2023, people were choosing three years, four years as the most popular option. But yet refusing to lock in for five years.”

The Bank of Canada is set to make its next interest rate announcement Wednesday.

Amid cooling inflation, it has signaled a cut could be coming, however experts say relatively high interest rates are here to stay.

“If the Bank of Canada changes that prime rate and they do make a decision, we're not expecting more than a quarter point at a time probably. They're going to go slow and steady wins the race on this,” said Wilkes.

Considering all the factors at play, her top piece of advice is to get different opinions at renewal time.

“Chat with whoever it is that you've got your mortgage with, that is always the path of least resistance, let’s be honest,” she said.

“But get a second opinion outside of that to say, ‘Is this actually my best mortgage? Is this actually my best offer?’ Because it's not always just the rate, it's what are all of those moving parts within that.”

CTV News asked dozens of brokers across the country for advice on renewing mortgages, including four in Edmonton. The answers to their questionnaires can be found below.

CTV News Edmonton Mortgage Broker Questionnaire.pdf by CTV News Edmonton on Scribd