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The last of the pandemic-era mortgages are coming up for renewal

If you locked in a five-year fixed mortgage between mid-2021 and mid-2022, your renewal is likely coming up within the next year. Plenty of North Okanagan households bought or refinanced in that stretch, so this one lands close to home. That group makes up about 12% of all mortgages in Canada, and the Bank of Canada estimates their payments will rise about 15% on average at renewal. That estimate was made before last week’s rate hike.

The reason is bond yields. Five-year fixed mortgage rates follow the five-year Government of Canada bond yield, which averaged 1.7% when those loans were signed. Last week it was more than double that.

Variable rates are up too. All six big banks raised their prime rate to 4.70% on October 29, following the Bank of Canada’s first increase in three years. The Bank’s next decision is December 9th, and some economists expect another hike.

There is some good news. Household incomes grew about 16% between 2021 and 2025, and more than 90% of people who renewed in the past year did so at a rate below the one they were stress-tested at when they first borrowed.

A few things worth knowing:

👉 If your renewal is in the next 12 months, start early. Many lenders will let you secure a renewal rate several months ahead, and comparing offers can save real money over a five-year term. Signing whatever renewal letter arrives in the mail is rarely the best deal. Heading south for the winter? Don’t let a renewal notice sit in a Vernon mailbox until spring. Set a reminder now and make sure your lender can reach you by email.

👉 If you’re buying, here in the North Okanagan the Association of Interior REALTORS® reported 126 residential sales in October, down from 149 a year earlier. With 828 homes active on the market this morning, buyers have real choice and time to ask questions. Winter is also a good time to see how a home handles snow on a sloped driveway and short daylight hours. Get a pre-approval with a rate hold before December 9th.

👉 If you’re selling, some buyers’ budgets are tighter this fall. Price for the market in front of you, and expect buyers to ask more questions about value, including what the home costs to heat through an Okanagan winter. We covered that in What Will It Cost to Run?

Have a renewal coming up, or wondering how today’s rates affect your plans? Reply to this email or call or text us at 250.309.0039, and we’ll help you think it through.

Talk soon,
CHRIS, PATRIC, JULIE, JASMINE, KRISTI, KRYSTAL & BRELL

P.S. Curious what your home is worth heading into your renewal? Reach out and we’ll put together a free home value report.

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