There is a brand new phenomenon Canadian homeowners are being faced with when their mortgages come up for mortgage renewal — higher interest rates. According to TD Economics, this has never happened before.

TD recently embarked on a report that investigated the transformation of the traditional five-year mortgage rate and mortgage renewal throughout the length of its term. While the previous twenty-five years has displayed a negative change—lower rates upon their renewal, there appears to be a new era of higher rates being ushered in.

How Has Five-Mortgages Changed?

At 4.43% by the end of September and 10 basis points higher than half a decade previous, rates are still comparatively low historically but steadily climbing. In fact, the difference became positive after a decade in the red earlier this year. Given the Bank of Canada’s stringent monetary policy, and the impending increase of bond yields, the interest rates are an apt reflection of lending conditions.

The effective interest rate on outstanding mortgages will increase around 95 basis points from Q3 of 2018 until the end of 2020, believes TD. According to TD economists, with approximately 25% of fixed-rate mortgages up for renewal per year, every fixed-rate household will have higher interest rates in four years. This will impact Canadians greatly, as the vast majority take out fixed-rate five-year mortgages.

The mortgage rate gathered by TD is the average of the five-year fixed rates for mortgages provided by banks, trust companies, credit unions, savings and loan, and life insurance companies. The rate comes from the Canada Mortgage and Housing Corp.

The posted rate acts as a good starting point for negotiations, where a plethora of homeowners acquires lower rates.

Unfortunately for Canadians, this new era in the mortgage market is going to be costly.