If you’re considering refinancing your mortgage in 2025, you’re not alone—and for good reason! As a licensed mortgage broker in Alberta, I’ve helped many homeowners strategically refinance to save money, reduce debt, and reach their financial goals faster.
Whether your mortgage is up for renewal or you’re thinking about breaking your term early (with a clear understanding of any penalties), refinancing could be the smart move you need to make this year.
Why Refinance Your Mortgage in 2025?
1. Secure a Lower Interest Rate
With interest rates gradually trending downward and the Bank of Canada expected to lower the overnight rate to 4.0% by year-end—and possibly 2.75% in 2025—now is a prime time to lock in a better rate. A lower rate means reduced monthly payments and potentially thousands of dollars in interest savings over the life of your mortgage.
2. Consolidate High-Interest Debt
Do you carry credit card balances, car loans, or other high-interest debt? Refinancing to consolidate debt into your mortgage can significantly reduce your overall interest costs. With one predictable monthly payment and a lower interest rate, managing your finances becomes easier and less stressful.
3. Access Your Home Equity
Need funds for renovations, post-secondary tuition, or a major purchase like a new vehicle? When refinancing, you can tap into your home’s equity to free up cash—without taking out a separate high-interest loan. It’s a smart way to make your home work for you.
4. Switch Your Mortgage Product
Not happy with your current mortgage setup? Whether you’re looking to switch from a variable to a fixed-rate mortgage (or vice versa) or adjust your amortization schedule for faster mortgage payoff, refinancing gives you flexibility to choose a product that better aligns with your financial goals.
2025 Mortgage Rule Updates That May Benefit You
There are some new mortgage policy changes in Canada that could work in your favour:
- No Stress Test for Uninsured Mortgage Renewals (Effective Nov 21, 2024): If you have an uninsured mortgage, you will no longer need to pass the stress test when switching lenders—giving you more options and potentially better rates at renewal.
- Refinance to Build a Secondary Suite (Effective Jan 15, 2025): If you’ve been thinking about adding a rental suite or expanding your home, default-insured mortgages may now be refinanced up to 90% loan-to-value to support this type of construction. A great way to increase your property value and earn extra income!
