Barely a year ago, some economists were predicting a wave of mortgage defaults as hundreds of thousands of Canadians prepared to renew their mortgages at higher rates. Since June 2024, the Bank of Canada has cut its key lending rate six times, helping to ease some of the pressure on borrowers. Mortgage rates, however, remain above pre-pandemic levels on average, prompting many households to adjust their budgets. Against this backdrop, Quebec homeowners appear, on average, to be less financially impacted by their upcoming mortgage renewals.
According to a recent Royal LePage survey, conducted by Hill & Knowlton,1 51% of Quebec homeowners whose mortgages are renewing in 2025 expect their monthly mortgage payment to increase upon renewal (31% expect it to increase slightly and 20% expect it to increase significantly). This is the lowest instance among the provinces in Canada.
Among Quebecers who anticipate an increase in monthly payments, 73% (compared to 81% across Canada) say that this increase will cause financial difficulties for their household – the lowest proportion in the country – including 26% who say that this financial burden will be significant (compared with 34% nationwide).
“Quebec’s economy is among the most diversified in Canada, and so are the jobs, which helps to support household financial stability, especially in times of global uncertainty. Combined with property values that are still relatively affordable compared to other provinces, this explains why Quebecers are less anxious about an increase in their monthly mortgage payments when they renew this year than their Canadian counterparts,” said Marc Lefrançois, real estate broker, Royal LePage Tendance in Montreal.
Among the Quebecers who expect higher monthly mortgage payments will result in a financial strain for their household, 70% intend to cut back on discretionary spending in response, the highest proportion in the country. However, Quebecers are the least likely to change their travel or vacation plans (29% compared to 43% nationally). Respondents could select more than one answer.
The survey also reveals that nearly four out of five respondents (78%) in the province do not intend to change their living arrangements to avoid potentially higher mortgage costs.
“In recent months, several economists have warned of a high risk of mortgage default, suggesting a major shock to the Canadian housing market. However, current data suggests that the proportion of homeowners actually vulnerable to an increase in their monthly payments may be lower than expected. What’s more, in an uncertain global economic context, the Bank of Canada is proving more inclined to support the Canadian economy than to fight the inflation that could result from a trade war with our neighbours to the south. We can therefore expect property buyers and existing homeowners to have even more breathing space in the months ahead, if the downward trend in borrowing rates continues,” points out Lefrançois.
Mr Lefrançois notes that, to date, despite political and economic instability, mortgage renewals are not causing major concern in the market. Quebecers remain resilient when it comes to their housing conditions, adding that buyers are moving quickly, with multiple offers back in the news at the start of the year.
According to the Canada Mortgage and Housing Corporation (CMHC), the mortgage delinquency rate in the province of Quebec remained at 0.17% in the third quarter of 2024, a rate that has not fluctuated for three consecutive quarters and that remains well below historic averages.2
According to the survey, 78% of Quebecers with a mortgage renewing this year currently hold a fixed-rate mortgage, while 21% have a variable rate. When asked what type of mortgage they plan to obtain upon renewal, 63% of respondents say they will opt for a fixed-rate loan, while 31% say they will choose a variable-rate mortgage. Respondents in this region were among the most likely to say they plan to obtain a variable-rate mortgage upon renewal, alongside Ontario. Thirty-two per cent of all Quebec respondents say they plan to obtain a five-year mortgage term upon renewal, followed by 23% who plan to sign on to a two-year term.
“Quebec homeowners who are approaching their mortgage renewal are taking a more strategic approach this year, and considering how to optimize their borrowing terms in response to an evolving interest rate environment,” said Sean Broady, real estate broker, Royal LePage Elite in Montreal’s West Island. “With both fixed and variable rates currently sitting between 4.6% and 4.7%, depending on the term length, and variable rates expected to decline further as the Bank of Canada moves to stimulate the economy, more borrowers are exploring shorter-term, fixed-rate mortgages or opting for variable rates to take advantage of potential future rate cuts. While the five-year fixed-rate mortgage remains a staple, we’re seeing increased interest in two- and three-year terms, allowing homeowners to remain flexible in an uncertain economic climate.”
Meanwhile, in Quebec City — the residential real estate market that saw the highest increase in the aggregate price of a property throughout 2024 in the province of Quebec and among major regions in Canada3 — mortgage renewals are not a topic of conversation.
“Mortgage renewals do not seem to be a major concern for homeowners in the Quebec City area,” said Louis Belzile, real estate broker, Royal LePage Blanc & Noir in Quebec City. “The greater source of concern among buyers is not finding a property due to low supply.
“In 2024, the Quebec City region experienced one of the highest rates of price appreciation in Canada – the beginning of 2025 signals stronger real estate demand than last year, amplified by the drop in the key lending rate on January 29th. The continued rise in home prices and demand provides some reassurance to sellers who will face increases in their monthly payments when renewing their mortgage. While the resale market is facing a severe shortage of housing supply in Quebec City, the rental market can still absorb some of the demand, even if the vacancy rate remains historically low,” he added. “For buyers, this means that they will have to be even more responsive and financially prepared to seize opportunities when they arise.”
Source: Royal Lepage
Director, Communications & Marketing, Quebec
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