The September 2021 Mortgage Cliff Is Here: What Homeowners Need to Know

The September 2021 mortgage cliff is officially here. 🇨🇦📉

Back in September 2021, Canadians were securing mortgages at some of the lowest rates we had seen in decades. For homeowners who chose a typical five-year fixed mortgage at that time, their renewal period is now arriving.

And for many homeowners, the numbers can look very different than they did five years ago.

What Happens When Your Mortgage Renews?

If you locked in a historically low mortgage rate in 2021, your renewal could mean transitioning from that low-rate environment into a significantly different interest-rate landscape.

That can translate into a substantial increase in monthly mortgage payments, depending on your original rate, remaining balance, amortization, and the rate available at renewal.

For homeowners who are already managing tight monthly budgets, that increase can create meaningful financial pressure.

Don’t Wait Until Renewal Day

If your mortgage renewal is coming up within the next few months, now is the time to start looking at your options.

Waiting until your lender sends you a renewal offer can leave you with less time to properly evaluate your choices.

Instead, consider starting the conversation early and looking at:

What your current mortgage balance is

Your remaining amortization

What your new payment could look like at different rates

Whether refinancing makes sense

Whether changing lenders could provide a better option

Whether extending your amortization could help manage monthly payments

What your overall financial goals are

And, importantly, whether keeping the property still makes sense for you

What If You’re Thinking About Selling?

A mortgage renewal can also be an opportunity to step back and reassess your overall situation.

If the potential payment increase is making you question whether you want to continue owning the property, selling isn’t the only conversation, but it should be one of the options you understand.

Before making that decision, it is important to look at the complete picture:

What could your home sell for today?

What would your mortgage payout and selling costs be?

How much equity would you walk away with?

Where would you live next?

And how would that decision fit into your longer-term financial goals?

There may be several paths forward, and the right one depends on your individual circumstances.

Don’t Panic. Plan.

A mortgage renewal doesn’t automatically mean you need to sell your home.

It also doesn’t mean you should simply accept whatever renewal rate your lender puts in front of you.

The important thing is to understand your options before you’re under pressure to make a decision.

If your mortgage is coming up for renewal in the next few months, let’s look at the numbers together and help you understand what your real-estate options could look like.

And if you’re considering selling because of your upcoming renewal, let’s have that conversation before you make any decisions.

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