Mortgage Renewal in 2025: How to Lock in the Best Rate and Avoid Payment Shock

Fixed mortgage rates have decreased recently, with many lenders lowering three- and five-year rates by 10 to 20 basis points due to falling bond yields and increased competition. In contrast, variable rates are becoming more expensive despite a recent reduction in the overnight rate, as lenders adjust discounts to maintain profit margins. With 1.2 million mortgages renewing in 2025, many homeowners expect payment increases. Strategies for managing renewals include assessing financial situations, understanding rate options, exploring shorter-term fixed rates, and consulting with professionals.