08:26 AM EDT, 05/09/2025 (MT Newswires) -- Prior to the trade war, Canadian consumer spending had been gaining traction, growing 3.6% in the four quarters of last year, the fastest pace in 2.5 years, noted Bank of Montreal (BMO).

Falling interest rates were a big driver, especially in

buffering the mortgage reset shock, said the bank.

The Bank of Canada's Financial Stability Report Thursday pointed out that "Based on current market expectations, more than 90% of mortgage holders with a five-year fixed-rate mortgage will face payment increases at renewal that are smaller than they were stress-tested for."

While renewals still face higher payments than at origination, the burden is lightening, stated BMO.

The average payment for renewals this year will be 8.2% higher than in December 2023, which is down from 10.4% in the second half of 2024. For loans renewing next year, the payment increase will shrink to just 5.2%, added BMO.