Refinances: How prominent will they be in this year’s market?

Houses for sale in Ottawa

Renewal wave set to dominate mortgage market in 2024

While the market may still not be right for borrowers to refinance, a huge number will face what’s certain to be one of the biggest trends of 2024 in the mortgage space: mortgage renewal, in most cases at a significantly higher rate than their original contract rate.

Approximately $900 billion worth of mortgages are scheduled for renewal between now and 2026, and O’Neil said his team’s strategy for the coming wave is to get out in front of clients as soon as possible to talk through their options and swiftly put a plan in place.

That’s still important even though most borrowers who took out their mortgage five years ago, in 2019, aren’t likely to face as steep a payment increase as those whose term began during the rock-bottom interest rate years of the early pandemic, in 2020 and 2021.

“Most of the renewals this year are from our 2019 borrowers, so that was kind of before the massive surge in 2020 and 2021,” O’Neil said. “So I don’t think we’ll see the surge of it yet until into 2025, and 2026 is going to be the big year.

“We’re trying to have that call [to discuss options] with people as early as possible up to at minimum, I’d say, six months before. A lot of times we would call people four months before, but now people appreciate those extra 60 days just for the advice piece.”

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