Interest Rates Have Doubled—But Your Payment Won’t

Think your mortgage payment doubles when rates do? Not so fast. In our new blog, we explore why amortization is your secret weapon, key mortgage trends for 2025, and how a few smart strategies can keep your monthly costs under control

Written by

Graham Reimer

Published on

January 13, 2025
BlogMortgage Agent Advice, Planning & Strategy
woman on a computer

Feeling Overwhelmed by Rate Increases?

If you’ve been hearing that mortgage interest rates are more than double what they were a few years ago, you’re not alone—and you might be wondering what that means for your monthly payment. The short answer? They won’t automatically double. Why? Because a mortgage payment is calculated over an amortization period (often 25 or 30 years), allowing you to stretch out the cost over time and avoid the full brunt of a rate increase all at once.

A Quick Look Back

  • 2020: Rates dipped below 2% by year’s end—some of the lowest we’ve seen.
  • 2023: Rates peaked and then began to ease slightly.
  • 2025: Although current rates are still higher than those 2020 lows, they’re about 1.5% below the recent peak from 2023. That’s progress!

So, How Does It All Add Up?

Let’s compare a $300,000 mortgage over a 25-year amortization at two different times:

  • At 2025 Rates: Monthly payments might be around $1,643.
  • At 2020 Rates: Monthly payments would have been about $1,299.

Yes, there’s an increase of about $344 a month—but it’s not double, even though the interest rate itself has more than doubled.

Mortgage Trends to Watch in 2025

      1. Gradual Rate Adjustments

  • Experts don’t expect rates to skyrocket again anytime soon. In fact, economic indicators suggest we might see some stabilization—or at least no dramatic hikes—over the coming year.

      2. Continued Demand for Renewals

  • Many 5-year mortgages from 2020 are coming due now. That means there’s a lot of business in renewals and refinances, giving brokers (and borrowers) more options to shop around.

      3. Flexible Products & Extended Amortizations

  • We’re seeing more lenders offer extended amortizations and flexible payment structures to keep monthly costs manageable. This is great news for anyone worried about making a sudden jump in monthly payments.

      4. Focus on Debt Consolidation

  • With rates still relatively higher than a few years ago, borrowers may use a refinance to consolidate higher-interest debts (like credit cards) into one manageable mortgage payment.

We’re Here to Help—And We Really Do Care

At Mortgage Excellence, we understand this can feel overwhelming—especially if you’re not a numbers person or you’re just hearing about big rate hikes on the news. That’s where we come in:

  • We’ll explain everything in plain language.
  • Show you exact figures for your renewal or refinance.
  • Discuss strategies like extending your amortization or consolidating debts.
  • Work to keep your costs down so you can focus on what truly matters in your life.

With our experience, tools, and genuine care, we’re committed to helping you navigate this changing landscape. If you’re worried about your upcoming renewal or you just want to explore your options, reach out—we’re always ready to chat. You might be surprised how manageable your new payment can be (and if it isn’t as low as you’d like, we’ll find ways to ease the pain).

We’re in your corner—every step of the way. Let’s make 2025 a year of smart moves and steady growth.