The latest industry reports paint a picture of a Canadian mortgage market in transition, and for Fraser Valley residents, these changes present both challenges and opportunities that deserve your attention.
Variable Rates Make a Strong Comeback
After months of uncertainty, variable-rate mortgages have surged back to popularity, capturing 42% of all new mortgage originations by February 2025. This dramatic shift reflects borrowers’ confidence that the Bank of Canada will continue cutting rates throughout the year.
For Fraser Valley homeowners considering renewals or refinancing, this trend is particularly relevant. The premium between variable and fixed rates has shrunk to just 0.2% – the smallest gap we’ve seen in years. If you’re coming up for renewal in 2025, this could translate to meaningful monthly payment reductions.
Shorter Terms Gain Ground
Alongside the variable rate revival, we’re seeing Fraser Valley borrowers increasingly choose fixed-rate terms between 3-4 years rather than the traditional 5-year commitment. These shorter terms now represent 32% of new lending, giving borrowers more flexibility to adapt as interest rates continue their downward trajectory.
This strategy makes particular sense in our current environment. With most major banks expecting the Bank of Canada’s overnight rate to drop to between 2% and 2.25% by year-end, locking into a shorter term could position you to benefit from even lower rates sooner.
The Reality of Mortgage Stress in BC
While national delinquency rates remain historically low at 0.21%, British Columbia has experienced a noticeable increase from 0.13% to 0.17% over the past year. This uptick reflects the pressure many BC homeowners have faced with higher carrying costs and living expenses.
However, this also represents opportunity. Lenders are becoming more accommodating as rates decline, and the removal of stress testing for mortgage switches in November 2024 has opened new doors for borrowers looking to optimize their mortgage structure. Understanding what is a mortgage stress test can help you navigate these changes.
Extended Amortizations: A Double-Edged Tool
The data reveals that 65.3% of new uninsured borrowers are choosing amortization periods longer than 25 years – the highest percentage in recent years. While this strategy reduces monthly payments, it’s important to understand the long-term implications.
For Fraser Valley families managing tight budgets, extended amortizations can provide crucial breathing room. However, as rates continue to fall, consider reviewing your payment structure to potentially shorten your amortization and save on total interest costs.
What This Means for Your Mortgage Strategy
If you’re renewing in 2025: You’re in a much better position than those who renewed in 2024. Consider whether a variable rate or shorter fixed term aligns with your risk tolerance and financial goals. Learn more about mortgage renewal strategies.
If you’re looking to refinance: Lower rates combined with relaxed switching rules create an ideal environment to consolidate debt, access equity for renovations, or simply reduce monthly payments. Explore your refinancing options or discover purchase plus improvements mortgages for renovation projects.
If you’re buying in the Fraser Valley: The combination of improving affordability and increased lender flexibility suggests better mortgage options than we’ve seen in over two years. Use our mortgage calculator to explore your purchasing power, or learn about what first-time home buyers need to know.
The Fraser Valley Advantage
Our local market benefits from several factors that position us well in this changing landscape. Strong employment fundamentals, steady population growth, and diverse housing options from Abbotsford to Mission provide stability that lenders recognize and value.
Additionally, our proximity to Metro Vancouver continues to drive demand while offering more affordable entry points for first-time buyers taking advantage of new 30-year amortization options.
Whether you’re in Abbotsford, Chilliwack, Mission, or Langley, our local expertise ensures you get mortgage solutions tailored to your community’s unique market conditions.
Looking Ahead
While economic uncertainty from trade tensions and political changes creates some market volatility, the underlying mortgage trends favor borrowers who stay informed and act strategically. The key is understanding how these national patterns specifically impact your situation in the Fraser Valley market.
Whether you’re approaching a renewal, considering a refinance, or planning a purchase, the current environment offers opportunities that may not last indefinitely. As mortgage professionals who understand both national trends and local market conditions, we’re here to help you navigate these changes and make decisions that align with your long-term financial goals.
The mortgage market is evolving rapidly, and staying ahead of these trends can make a significant difference in your financial future. If you’re ready to explore how these developments might benefit your specific situation, we’d welcome the opportunity to review your options and discuss strategies tailored to your needs.
Data and insights in this article are based on CMHC’s Residential Mortgage Industry Report Spring 2025 Edition and industry analysis from Canadian Mortgage Professional. For detailed statistics and methodology, visit CMHC’s Housing Research Reports.
