Median monthly payment to increase by more than 60% for those with a variable rate mortgage, central bank report says
Homeowners due to renew their mortgage over the coming years will face steep jumps in payments, according to the Bank of Canada, with median monthly payment increasing by more than 60 per cent for those with a variable rate mortgage.
Since the central bank started aggressively hiking interest rates in March 2022, about half of the country’s outstanding mortgages have renewed at higher rates. Currently, the bank said stress among mortgage holders is unchanged and income growth, accumulated savings and a reduction in spending has helped homeowners handle the higher interest rates.
The report said the office real estate market is under pressure with office vacancies rising in major cities. That includes Toronto, the country’s financial capital, where the vacancy rate is nearing 20 per cent. For those mortgage holders, the steepest rise will occur in 2026 with a median percentage increase of more than 60 per cent, according to bank estimates. In 2025, the median increase in the monthly mortgage payment is more than 50 per cent and this year, about 30 per cent.
The report did note, however, that Canada’s small and medium-sized banks are in a tougher spot. Some of these institutions specialize in lending to higher-risk clients and tend to issue shorter-term mortgages. The share of mortgages in arrears has risen more for these institutions.
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