Mortgage Reset Wave Will Hit Harder Than U.S. Market, Ontario Investor Warns

Written by:

Steve Marcinuk

Date:

30 Dec 2025

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

Ontario’s real estate market is approaching a mortgage reset crisis that will be more severe than what is unfolding in the United States, according to Sebastian Jania, co-founder of Ontario Property Buyers. The cause is not property values or general economic trends, but the structure of Canadian mortgages.

Jania points out that Ontario’s standard five-year mortgage terms will force many homeowners to renew at much higher interest rates within a short window. “With the wave of renewals still to come, and with the terms in Ontario, like the typical mortgage terms being five-year terms versus these longer terms in the States, I think there’s going just to be a lot more pain felt here than maybe in the US,” Jania says. While American homeowners often lock in 15- or 30-year fixed rates, most Ontarians must accept new terms every five years, exposing them directly to today’s higher rates.

This risk is not hypothetical or far off. “Maybe they got in 2021 at an outstanding rate, but in the next few years, a lot of those rates are going to come up for renewal,” Jania explains. The timing means a large group of homeowners who secured low rates during the pandemic will all face higher payments at once, rather than having renewals staggered over many years, as in the U.S.

Renewal Pressure Is Changing Seller Behavior

This approaching wave of higher mortgage payments is already changing how sellers approach the market. Jania observes a marked increase in urgency among distressed sellers. “I think there are just more people who need to sell. And before, maybe it was a little bit more about convenience. And now it’s more and more people like, hey, I need to be out in 30 days because of this,” he says. The shift from discretionary sales to necessity-driven listings is a significant change in market dynamics.

Jania notes that this sense of urgency is not limited to sellers in default or facing the power of sale. Instead, it is spreading to homeowners who are simply reviewing their upcoming renewal terms and realizing they cannot afford the increased payments. “There’s just more kind of intensity with every seller,” Jania notes, describing how deadlines and financial pressure now dominate conversations that might previously have been casual.

This urgency complicates transactions. Sellers who delay seeking help often lack clarity about their financial status, which makes negotiations more difficult. “These kinds of sellers, a lot of the time, they bury their heads in the sand with everything involved in their lives,” Jania says. “Getting exact mortgage amounts is trickier. Having open communication with them as we’re trying to work through our process is trickier.”

Why Investors Must Get More Conservative

For investors, Jania argues the upcoming renewal crunch demands a much more cautious approach to property evaluation. “Running the numbers very, very conservatively is more important than ever,” he says. “Even for us right now, when we’re buying properties to flip, we’re actually expecting the values to be less by the time we sell.”

This discipline serves two purposes. It protects investors from losses as property values decline, and it allows them to pass on safer deals to their own buyers. “We were always conservative to begin with, but now there’s that extra layer of being conservative, and that’ll protect us better on the flips,” Jania explains. “But it’ll also provide better opportunities if we are wholesaling the properties, because now our investors are not paying at a price where they’re going to get burned.”

Jania sees a clear divide emerging: while investors who plan carefully will find more opportunities as prices fall, ordinary homeowners will face increasing difficulty. “I think on the investor side of things, I think there will be more opportunities in 2026,” he says. “I don’t see a ton of light to the actual real estate market for the average person.”

Advice for Homeowners Facing Renewals

For homeowners preparing for renewal, Jania offers practical but challenging advice. “Be willing to live a little bit more minimalistically, pay certain debts down to be able to kind of get into a position where you can build from that,” he suggests. Reducing debt and cutting expenses before renewal can help owners better handle higher mortgage payments.

Whether this will be enough depends on how much the rates increase by the time renewals occur. Jania makes it clear that the days of relying on rising home values and maintaining high debt are over. “Unfortunately, personally, I don’t see things getting that much better, at least for a while,” he says.

Ontario Property Buyers is adapting to this environment by offering homeowners several exit strategies, depending on their equity and timeline. The company provides traditional cash purchases, creative partnerships to renovate and list homes, and referrals to conventional agents when appropriate. Jania suggests that as the renewal crisis intensifies, more companies will need to offer flexible solutions instead of single-option offers, since distressed sellers increasingly require tailored strategies rather than just a quick sale.

As Ontario’s renewal wave approaches, the market will likely see a widening gap between those who can adapt and those who are forced to sell. The following two years will test the resilience of homeowners—and the adaptability of both investors and service providers—across the province.