If your mortgage is up for renewal this year, you’re in good company, and no, that’s not entirely a comforting statement. A massive wave of Canadian homeowners locked into historically low rates back in 2020 and 2021 are now reaching the end of their terms. That means millions of households are navigating renewal conversations for the first time in years, often with very different rate expectations than what’s waiting for them.
Here’s the good news: you have more options than you might think. Here’s everything you need to know before you sign anything.
Why 2026 Is Different
During the pandemic, the Bank of Canada dropped its overnight rate to near zero to keep the economy afloat. Five-year fixed rates fell to historic lows, some well below 2%, and borrowers who locked in during that window got an incredible deal. Fast-forward to today, and even with the Bank of Canada having cut rates significantly since their 2023 peak, current mortgage rates are still meaningfully higher than what many of those borrowers were paying.
The result is what lenders and economists are calling the “renewal wave,” a large cohort of mortgages hitting maturity all at once, with many homeowners facing a payment increase they hadn’t fully planned for.
What “Payment Shock” Actually Looks Like
Let’s say you locked into a five-year fixed rate of 2.2% in early 2021 on a $500,000 mortgage. At renewal, you might be looking at a rate closer to 4.5% or higher, depending on the term and lender you choose. On a 25-year amortization, that could translate to several hundred dollars more per month. It’s a real adjustment, and it catches some borrowers off guard.
That said, “payment shock” doesn’t have to mean financial hardship. With the right preparation, many homeowners come out of renewal in a strong position.
Your Options at Renewal
Most lenders will send you a renewal offer a few months before your term ends. That offer is a starting point, not a take-it-or-leave-it deal. Here’s what you can do:
Consider variable vs. fixed. With the Bank of Canada on a gradual easing path, a variable rate may make sense for some borrowers. It’s worth having a conversation about your risk tolerance and timeline.
Shop around. Your lender is hoping you’ll just sign. A mortgage broker can compare rates across dozens of lenders in minutes and often find something better.
Refinance. If your home has appreciated in value, renewal is a great time to revisit your mortgage structure, access equity, consolidate debt, or adjust your amortization.
Switch lenders. If a different lender is offering a better rate, you can switch at renewal with no penalty. The process is simpler than most people expect.
Tips to Prepare Right Now
If your renewal is coming up in the next six months or so, here’s what to do:
Don’t focus only on rate. Prepayment privileges, portability, and penalty structures matter too, especially if your life circumstances might change.
Check your paperwork. Know your renewal date, your current balance, and your remaining amortization.
Get pre-approved elsewhere before you respond to your lender. You’ll negotiate with much more confidence.
Talk to a broker early. Many lenders allow you to lock in a rate 90 to 120 days before your term ends, so there’s value in starting the conversation well ahead of time.
The Bottom Line
Renewal season doesn’t have to be stressful. Yes, rates are higher than they were a few years ago; but this is also an opportunity to step back, reassess your mortgage, and make sure it still fits your life. With the right guidance, many homeowners actually end up better positioned after renewal than they were before.
If your mortgage is coming up, we’d love to help you review your options and find the best fit for your situation.
