Canada is moving through what lenders and economists have described as a mortgage renewal wave. Roughly 1.2 million mortgages are scheduled to renew in 2026, one of the largest single-year cohorts on record. The reason so many renewals cluster in this period traces back to the pandemic housing market: large numbers of buyers and refinancers locked in five-year fixed terms during 2020 and 2021, when rates were at historic lows. Those terms are now coming due.
At a glance
- About 1.2 million Canadian mortgages are set to renew in 2026, an unusually large cohort.
- Many borrowers who locked in around 1.5–2.3% in 2020–21 are renewing near 4–5%.
- Industry estimates put the typical payment increase for affected fixed-rate borrowers near 20%.
- With the Bank of Canada paused at 2.25%, rates have been relatively stable through 2026 rather than falling sharply.
- Renewing does not require staying with the same lender; switching is possible but may involve a new approval and costs.
Why payments are jumping
The arithmetic is straightforward even if the impact is not. A borrower who secured a five-year fixed rate around 1.5% to 2.3% in 2020 or 2021 is renewing in 2026 into a market where five-year fixed rates at the major banks sit in the low-4% range, and competitive rates from other lenders are somewhat lower. Because a mortgage payment is spread over the remaining amortization, a move from roughly 2% to roughly 4.5% can raise a monthly payment by several hundred dollars, commonly cited in the range of $500 to $900 or more on a typical mortgage.
Industry analysis suggests the average payment increase for fixed-rate borrowers renewing this year is around 20%. The exact figure depends on the original rate, the new rate, the outstanding balance and the remaining amortization, so individual outcomes vary widely.
Fixed or variable at renewal?
With the Bank of Canada holding its policy rate at 2.25% through 2026, the sharp swings of recent years have calmed. That changes the fixed-versus-variable question. A longer five-year fixed term offers payment certainty but locks in today’s rate for the full term. A shorter fixed term of one, two or three years, or a variable rate, keeps more flexibility to reset sooner if borrowing costs ease later — at the cost of less certainty in the meantime.
There is no universally correct answer. The right structure depends on a household’s budget, tolerance for payment changes and view on where rates are heading. What matters is understanding the trade-off rather than defaulting to whatever term was chosen last time.
What to check before you renew
A renewal letter from an existing lender is an offer, not an obligation. Some practical steps can make a meaningful difference:
- Start early. Many lenders let you begin the renewal conversation months before maturity, which leaves time to compare.
- Compare beyond your current lender. The rate on a renewal letter is not always the lender’s best available rate, and other institutions may offer better terms.
- Factor in the stress test. Switching lenders can require requalifying, which may involve the mortgage stress test; staying with the same lender at renewal often does not.
- Weigh the payment, not just the rate. Amortization, payment frequency and prepayment privileges all affect the monthly figure and long-run interest.
- Ask about costs of switching. Discharge, transfer or appraisal fees can offset a slightly lower rate.
A renewal is a decision, not a formality
Because so many households are renewing at once, it is easy to treat the process as routine. But the payment change can be significant, and the terms are negotiable. Comparing options and understanding the fixed-versus-variable trade-off is time well spent.
The broader picture
Beyond individual households, the renewal wave has macroeconomic weight. Higher mortgage payments leave less room in household budgets for other spending, which can temper consumer demand and, in turn, inflation. Shelter costs, including mortgage interest, also feed into the Consumer Price Index. That is one reason policymakers watch the renewal cycle closely: it links the interest-rate decisions of prior years to the spending power of families today.
Sources: Ratehub, mortgage renewal rates in Canada, Ratehub, renewing your mortgage in 2026 and Bank of Canada, policy interest rate. Advertised rates are examples that change frequently; confirm current terms directly with lenders.
This article is for general information only and does not constitute individual financial or mortgage advice. Mortgage rates, qualification rules and lender terms can change at any time and vary by borrower. Before renewing or switching a mortgage, compare current offers and consider advice from a licensed mortgage professional.