Canada’s economy faces $900-billion mortgage renewal shock

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The biggest shock awaits variable-rate mortgages set to renew in 2026. A five-year variable mortgage renewing in October of that year would see payments jump 76 per cent if mortgage rates stayed around 6 per cent

The sharp run-up in interest rates over the past 19 months has been painful for consumers, but unless rates drop significantly, almost two-thirds of Canadian mortgage holders still face a punishing “payment shock” over the next three years.

The focus of the report is the impact the payment shocks will have on the retail operations at Canada’s big banks, but the economic fallout is obvious if the current interest rate environment persists.

 

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