The increase in interest rates has been especially hard for younger Canadian homeowners , as they are allocating as much as 70 per cent of their monthly household budget to their mortgage , according to a new survey by Rates.ca.

Of those aged 18 to 34, 56 per cent said they are now dedicating anywhere from half to almost three-quarters of their monthly household budget to their mortgages. Ninety per cent of those who renewed their loans said they were now paying higher interest rates, according to the survey of about 1,500 adults conducted by Leger in late July.

“These findings show just how little financial flexibility some homeowners have after renewing,” Victor Tran, Rates.ca mortgage and real estate expert, said in a press release. “When half or more of a household’s monthly budget is going toward the mortgage, there’s much less room to absorb other expenses or an unexpected financial setback.”

But younger people aren’t the only ones feeling the squeeze, the survey said.

Of those who have renewed their mortgages since January 2025, 82 per cent said they are on the hook for a different rate, with most of the increases reportedly in the range of two per cent to 4.99 per cent, while 45 per cent said their mortgage payments accounted for more than half of their monthly budget, Rates.ca said.

These homeowners are the latest group to ride the mortgage renewal wave that was predicted by economists to hit Canada following the frenzy of home buying at ultra-low borrowing rates between the final quarter of 2020 and the first quarter of 2022.

Roughly 1.8 million mortgages were forecasted to come up for renewal between September 2025 and September 2026, cresting in June 2026, according to Robert Kavcic, a senior economist at BMO Capital Markets. Another smaller wave of renewals is expected in 2027.

Kavcic said in a BMO report that many of those renewing mortgages would “be coming off the lowest-of-low interest rates from five years prior,” with five-year fixed rates sitting below two per cent back in 2021 and variable rate mortgages at 1.5 per cent.

Currently, five-year fixed insured and uninsured mortgage rates sit at 3.92 per cent and 4.29 per cent, respectively, according to rate site Mortgagelogic.news.

“Elevated household debt, stagnating purchasing power and high interest rates have put pressure on households’ finances in recent years,” Charles St-Arnaud, chief economist at Servus Credit Union in Edmonton, said in a note on Monday that looked at insolvency data.

Insolvencies , which include bankruptcies and proposals to renegotiate loan terms, rose 9.4 per cent in June from the month before to their highest level since July 2025, he said.

St-Arnaud said total proposals sit “well above” pre-COVID-19 levels and insolvencies in British Columbia, Ontario, Manitoba, Alberta and Saskatchewan — provinces with higher-than-average debt-to-disposable-income ratios — registered above those seen in 2019.

David Rosenberg , president of Rosenberg Research & Associates Inc., said Canadian homeowners are in trouble because of “sky-high loan-to-value mortgages at the time of origination,” rising numbers of mortgages in arrears and “nose-bleed-high” median loan-to-income ratios.

“It comes down to the crushing level of Canadian household debt,” he said in a note. “What was once a prudent and conservative society turned outright reckless and profligate in recent years.”

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United States consumer inflation slowed slightly to 3.4 per cent in July despite turbulent oil prices due to the Iran war, government data showed. The figures likely give the U.S. Federal Reserve room to breathe on interest rates, say analysts. — Agence France-Presse

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In the six years Rosa and her partner lived together their finances became enmeshed, including a shared chequing account, a joint credit card and a car loan. After splitting up two months ago, Rosa asked FP Answers for advice on how to separate her finances from those of her ex. Some of her concerns are how to figure out whose debt is whose and how to remove her name from shared accounts. She’s also worried that her former partner could ruin her credit rating without her knowing it. Here’s what the debt expert had to say

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McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.

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