Tariffs, Turbulence, and Your Mortgage Renewal: What Every Canadian Homeowner Needs to Know Right Now
There’s a quiet unease building behind the headlines — one that doesn’t start with mortgages, but will absolutely end there. The latest volley of global tariff tensions — especially between major trade players like the U.S. and China — has started sending ripples through the Canadian economy. For homeowners gearing up to renew their mortgage in 2025, the question becomes not just “what will rates do?” but “what should I do about it?”
Let’s unpack what’s really going on and how you can make smart, proactive choices in this unpredictable landscape.
Why Tariffs Affect Mortgage Rates in Canada
Tariffs, at their core, are taxes on imported goods. When countries like the U.S. impose tariffs on steel, electronics, or consumer goods, the economic impact trickles down to:
Rising prices
Slower GDP growth
Shifting interest rate policies
For Canadians, this matters because when economic growth slows, the Bank of Canada often steps in to stimulate the economy — and that could mean lower mortgage rates in the short term.
Will Interest Rates Drop in 2025?
The Short Answer: Possibly.
Thanks to global tariff turmoil, many analysts predict that the Bank of Canada may hold or even reduce interest rates in the coming months. That’s great news if your mortgage is up for renewal.
But — and this is a big but — economic winds shift quickly. If inflation rises again due to disrupted supply chains or oil prices, we could see rates spike by late 2025.
Strategy tip: Lock in while rates are low, but maintain flexibility in case they shift back up.
4 Smart Mortgage Renewal Strategies in 2025
1. Start Early
Most lenders let you lock in your renewal rate 120 days in advance. If your mortgage comes up before August, start the conversation now.
2. Don’t Auto-Renew
Your current lender’s offer isn’t always your best option. A licensed mortgage broker can shop the market and often secure better rates and terms.
3. Explore Variable or Shorter Terms
If you’re comfortable with some market risk, a variable-rate mortgage or shorter fixed term could help you ride future rate drops.
4. Align Your Mortgage with Your Life
Planning renovations? Looking to become mortgage-free faster? Your renewal is a perfect time to restructure amortization, payment schedules, and prepayment options.
Mortgage Rate Forecast: What We’re Watching
Bond yields → Volatile due to global instability. Lower yields = lower fixed mortgage rates.
Inflation trends → Still sticky, but cooling.
Bank of Canada policy → Currently cautious, leaning toward holding or slight easing.
Translation? It’s a window of opportunity — but it may not stay open for long.
Final Word from Your Mortgage Broker
Renewing your mortgage during a global economic standoff isn’t ideal — but it’s not a crisis either. With the right guidance, you can turn uncertainty into advantage. Have questions about your renewal, fixed vs. variable, or locking in the best rate? Reach out today — before the winds shift again. 👉 Let’s talk mortgages. https://mortgagewithlyndsy.com/contact/