After two tough years of rising interest rates, the Bank of Canada paused and even trimmed its policy rate in early 2025. That means many Saskatchewan homeowners – in Saskatoon, Regina and surrounding areas – are seeing modest relief in monthly payments. But for those renewing within the next 24 months, stress is mounting: pandemic-era low fixed rates are giving way to much higher current rates. This guide breaks it down and includes local tips tailored to your renewal journey.
Did You Know?
- Variable‑rate borrowers in Saskatchewan have seen ~5–7% lower monthly costs YTD.
- Nearly 60% of current mortgages — including those in Saskatoon and Regina — renew by late 2026.
- Nationwide mortgage payments dropped 1.7% in late 2024—the first consecutive decline since 2020.
- Canada’s household debt‑service ratio eased to 14.4% in Q1 2025 (down from 15.1% peak in Q4 2023).
- Saskatchewan homeowners renewing five‑year fixed rates locked in at ~2% are now facing ~4.4% terms.
Why Some Payments in Saskatchewan Are Starting to Fall
Monthly payments depend on two key factors: interest and amortization schedule. Rate cuts earlier this year helped variable‑rate homes in Saskatoon, Regina and beyond, while bond‑linked fixed rates also softened. Add in extended amortizations or prepayments from many borrowers, and even small rate relief is noticeable—sometimes translating into significant monthly savings.
The Renewal Crunch: What It Means for Saskatoon & Regina Residents
The renewal squeeze is real math. Say you borrowed $500K at 1.8% in 2020 – your payment was ~$2,100/mo. If that rate flips to 4.4%, it jumps to ~$2,700/mo +$600 every month. That’s a major hit to household budgets, from groceries to retirement savings—for households across our community.
Regulators and the Bank of Canada are clear: about 60% of mortgages renewing by the end of 2026 will face higher payments, even under a mild economic outlook. Lenders qualify with a stress test (contract rate + 2% or 5.25%), but household income and job stability still make all the difference.
Local Strategy: Five Smart Moves Before Renewal
- Talk 6–8 months early. Let’s run renewal scenarios using our Saskatoon Mortgage Renewal Calculators.
- Make extra payments. Even an extra $100 down now reduces your principal and softens the future rate impact.
- Extend amortization temporarily. Reduce monthly costs now—then accelerate payments later.
- Consolidate high-interest debt. Use a HELOC or refinance your mortgage to bring down costly credit-card rates.
- Ask about blended rates. Blend your current rate with a new one to ease payment spikes before fully refinancing.
Top 10 FAQs – Saskatchewan Edition
- 1. Why are payments dropping overall if rates barely changed?
Mix in declining variable loans, new origins and unchanged fixed terms—along with rising incomes—and you get lower averages. - 2. Will every homeowner renewing in 2025 have a higher payment?
Not necessarily. Adjustable-rate holders from 2023 may benefit from lower payments. But fixed-rate renewals from 2020–2021 likely face hikes. - 3. How much will my payment increase?
Switching from ~2% to ~4.5% could mean a 20–25% increase, varying by amortization. - 4. Does the stress-test ensure affordability?
It helps, but assumes income stability and no new debts—so budgeting ahead is vital. - 5. Can I switch lenders at renewal without penalty?
Yes—no penalty at maturity—but you may pay appraisal or legal fees. Many lenders cover these to win your business. - 6. What if rates drop before my renewal?
You can usually lock a rate‑hold, letting you “float down” if market rates decrease before closing. - 7. Should I break early to lock in a low fixed rate?
Run the math. Often best to wait until ~90 days before maturity to avoid penalty fees. - 8. Will extending amortization cost me more long-term?
Yes—monthly payments down, total interest up. Use it as a short-term cushion. - 9. Fixed or variable this cycle?
Variable offers savings if rates stay stable or drop; fixed gives predictability. A hybrid or blend may be the best of both. - 10. Could widespread renewal stress impact Saskatoon or Regina housing?
Job markets remain strong in both cities, so broad impact is unlikely—but localized softness could occur.
Key Stats – Saskatchewan Mid‑2025
- Bank of Canada policy rate: 2.75%, unchanged since June.
- Prime rate: ~4.95% at major lenders.
- Variable‑rate payment drops in province: 5–7% YTD.
- Debt‑service ratio in Canada: 14.4%, down from 15.1% in late 2023.
- ~60% of Canadian mortgages (incl. Saskatchewan) renew by end‑2026.
- Current five‑year fixed rates: ~4.4% (vs ~2% in 2020).
- Mortgage delinquency nationally: 0.16%, starting to rise in oil‑producing provinces.
- Avg new mortgage in Canada: $458K, up 3% from last year.
What to Do Next – Saskatoon & Regina Homeowners
A small dip in payments is no reason to relax—especially if your mortgage renews in the next two years. Start prepping: update your budget, gather your documents, and connect with us for a free renewal readiness checkup. We’ll model scenarios, explore amortization shifts, prepayments or blends, and lock in the right plan—right here in Saskatoon and Regina.
Questions? Reach out to our local team today. We’re here to help you stay ahead of the curve.
