If your mortgage is coming up for renewal in 2026, you're not alone. A massive wave of Canadian mortgages originated during the ultra-low rate era of 2020-2021 are now hitting their renewal dates. For many homeowners, this means facing significantly higher rates than what they've been paying.
The Renewal Reality
Many homeowners locked in 5-year fixed rates between 1.5% and 2.5% during 2020-2021. Today's renewal rates in the high-3% to mid-4% range represent a significant jump. Here's what that looks like in practice:
| Original Rate | Renewal Rate | Payment Increase |
|---|---|---|
| 1.89% | 4.19% | +18% |
| 2.29% | 4.19% | +15% |
| 2.79% | 4.19% | +11% |
For a $500,000 mortgage with 20 years remaining, moving from 2% to 4.19% means approximately $350-$400 more per month.
Strategies to Minimize Payment Shock
1. Shop Around — Don't Just Accept Your Lender's Offer
Your current lender will send a renewal offer, but it's rarely the best rate available. Get quotes from at least 3-4 lenders and use competing offers as leverage.
2. Consider Your Term Length
With the Bank of Canada holding at 2.25% and no cuts expected soon, a 3-year fixed term may offer slightly lower rates than 5-year, giving you the flexibility to renew again if rates decrease.
3. Extend Your Amortization
Some lenders allow you to extend your amortization back to 25 or 30 years at renewal, which reduces monthly payments (though you'll pay more interest over time).
4. Make a Lump Sum Payment
If you have savings available, making a lump sum payment before renewal reduces your principal and therefore your ongoing payments.
When to Start Preparing
Most lenders allow you to lock in a renewal rate 120-180 days before your maturity date. Start shopping 6 months early to secure the best rate.
Use our mortgage calculator to model your renewal scenarios, or contact us for a referral to trusted mortgage professionals.