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If you're approaching your mortgage renewal date in 2026, you're part of a massive wave of Canadian homeowners facing critical financial decisions. According to CMHC estimates, approximately 1.15 million Canadian mortgages will renew in 2026, with another 940,000 following in 2027. This unprecedented volume creates both challenges and opportunities for savvy homeowners who prepare early.
The stakes are significant. TD reports that 85% of mortgages renewing in 2025-2026 were opened when the Bank of Canada's key lending rate sat at or below 1%. That means most borrowers secured their original terms in a dramatically different rate environment than what exists today.
Here's the good news: the severe mortgage shock many predicted hasn't fully materialized. Interest rates fell to 2.25% by the end of 2025, down from 5% in 2023, according to The Logic's analysis. Still, approximately 60% of Canadian mortgages renewing in 2025 or 2026 will face higher monthly payments. This guide delivers practical mortgage renewal tips Canada homeowners need to navigate their renewal successfully and minimize financial stress.
At Neobanc, we understand that managing your mortgage payments effectively is crucial during this transition. Let's explore how you can secure the best possible outcome for your renewal.
Before you can negotiate effectively or make smart decisions about your renewal, you need a crystal-clear picture of where you stand today. Many homeowners haven't looked closely at their mortgage details since signing their original paperwork. Now is the time to change that.
Pull out your most recent mortgage statement and document these critical details:
This information forms the foundation for every renewal decision you'll make. Without it, you're negotiating blind.
Timing matters enormously in the renewal process. Ratehub.ca confirms that you can typically begin shopping for renewal rates up to 120 days before your mortgage term ends without paying a penalty. Many lenders also allow you to lock in a fixed mortgage interest rate during this window, offering protection against potential rate increases.
This four-month head start gives you time to:
Here's a concerning statistic: 27% of Canadians don't have a strong understanding of mortgage affordability or how to make their mortgage more affordable, according to TD's survey. Don't fall into this category. Take time to understand how loan-to-income ratios affect your vulnerability and overall financial health.
Calculate your current loan-to-income ratio by dividing your mortgage balance by your annual gross income. If this ratio exceeds 4.5, you may face more scrutiny from lenders and should consider strategies to strengthen your position before renewal.
Setting realistic expectations helps you plan effectively. The numbers vary significantly depending on your mortgage type and when you originally secured your rate.
CMHC data indicates that average monthly payments are estimated to be around 6% higher for 2026 renewers compared to December 2024 levels. However, this average masks significant variation.
Expected 2026 Payment Changes by Mortgage Type
| Mortgage Type | Market Share | Expected Change |
|---|---|---|
| 5-Year Fixed | ~40% | +15% to +20% |
| Variable-Rate Fixed Payment | ~35% | +5% to +10% |
| Variable-Rate Variable Payment | ~25% | -5% to -7% |
| All Mortgages (Avg) | 100% | +6% |
Holders of five-year fixed-rate mortgages, who make up roughly 40% of the market, could see monthly payments climb by 15% to 20% at renewal, according to MPA Magazine's analysis. This translates to real dollars: monthly payment increases of $106 to $200 for many borrowers based on fourth-quarter reports from Canada's major banks.
For variable-rate, fixed-payment borrowers renewing in 2026, the situation varies dramatically. About 10% of these borrowers could face payment increases greater than 40%. This group typically saw their payments frozen during rate hikes while their amortizations extended - sometimes to 40, 50, or even 70 years on paper.
At renewal, the math catches up. If you're in this category, preparing now is essential. Consider how your overall credit score improvement might help you qualify for better options.
Not all news is challenging. Approximately 25% of all Canadian mortgage holders are projected to see their payments decrease by the end of 2026. Those with variable-rate, variable-payment mortgages could see payments decline by 5% to 7% on average as they benefit from the rate cuts that occurred throughout 2024 and 2025.
Your renewal notice from your current lender represents their opening offer - rarely their best one. Treating it as the final word leaves money on the table.
As of January 29, 2026, Ratehub.ca reports the best high-ratio, 5-year fixed mortgage rate in Canada is 3.84%, available across Ontario, Quebec, British Columbia, and Alberta. The best high-ratio, 5-year variable rate sits at 3.35%.
Compare these benchmark rates against what your lender offers. A significant gap indicates room for negotiation or a strong case for switching.
Approach at least three to five lenders or mortgage brokers. This gives you:
Ratehub.ca reports that borrowers could save $13,857 on average by switching versus renewing with their bank. Even if you ultimately stay with your current lender, having competing offers in hand strengthens your negotiating position.
Lenders don't offer identical rates to everyone. Your rate depends on factors including your credit score, loan-to-value ratio, income stability, and the mortgage amount. If your credit has improved since you first got your mortgage, you may qualify for better rates than expected.
Use tools like our cashback calculator to understand how optimizing your financial habits can benefit you during this process.
Loyalty to your current lender has its limits. In some situations, switching to a new lender delivers substantially better outcomes.
Switching lenders typically involves costs including:
Compare these one-time costs against your potential savings over the new term. A 0.25% rate difference on a $400,000 mortgage saves approximately $1,000 per year - easily justifying typical switching costs.
Consider switching if:
Understanding your credit rebuilding options can help position you for better rates when switching.
Staying with your current lender often works better when:
Even with rising rates, several strategies can soften the impact on your monthly budget.
The Bank of Canada's simulation found that about half of borrowers facing higher payments could fully eliminate the increase by extending their amortization by five years. For example, if you have 20 years remaining, extending to 25 years spreads your principal over more payments, reducing each monthly amount.
This strategy involves trade-offs. You'll pay more interest over the life of your mortgage. However, it provides breathing room now, and you can always make extra payments when your finances allow.
If you've built savings, applying them against your principal before renewal reduces the amount you're financing at the new rate. Even $5,000 or $10,000 can noticeably reduce your monthly payment at the new rate.
While five-year terms dominate the Canadian market, shorter terms like two or three years sometimes offer lower rates. If you believe rates will continue declining, a shorter term lets you renew again sooner at potentially better rates. This strategy carries risk if rates rise instead, so weigh it carefully.
While you're planning your 2026 renewal strategy, discover how Neobanc gives you 0.5% cashback on every mortgage payment you make.
See Your CashbackThe fixed versus variable decision requires careful consideration of your risk tolerance, financial stability, and market outlook.
Fixed-rate mortgages provide payment certainty for your entire term. With the best 5-year fixed rates around 3.84%, you lock in predictable payments regardless of what happens to interest rates. This suits homeowners who:
Variable-rate mortgages currently offer lower starting rates around 3.35%. Historically, variable rates have saved borrowers money over the long term. Variable rates appeal to homeowners who:
Some lenders offer hybrid products that split your mortgage between fixed and variable portions. This hedges your bets, providing partial protection against rate changes while maintaining some exposure to potential savings.
Your credit score directly affects the rates lenders offer. The months before renewal represent crucial time to strengthen your credit profile.
Focus on these high-impact actions:
Understanding how rent affects your credit can also help you make informed decisions about reporting payments that build your profile.
Certain actions can temporarily damage your credit score:
If you're working to build credit history fast, start now rather than waiting until renewal approaches.
Approaching your renewal negotiation prepared can save thousands of dollars over your term.
Before calling your lender, know:
When you call your lender, be direct but professional. State that you've been shopping rates and have found better offers elsewhere. Ask what they can do to match or beat those rates. Most lenders have authority to offer better rates to retain customers - they just don't advertise them.
Key phrases that help:
Once you've negotiated a rate, ask about rate holds. Many lenders will guarantee your negotiated rate for 90 to 120 days, protecting you if rates rise before your renewal date arrives.
The interest rate isn't the only factor that matters. Other mortgage features can provide significant value or flexibility.
Look for mortgages that allow you to:
These options let you pay down your mortgage faster without penalty when your finances permit.
If you might move during your term, portability lets you transfer your mortgage to a new property without penalty. This feature becomes especially valuable if you've locked in a favorable rate.
Some lenders offer blend-and-extend options that let you combine your existing rate with current rates and extend your term mid-contract. This can help if rates drop significantly during your term.
Key Mortgage Features Comparison
| Feature | Benefit | What to Look For |
|---|---|---|
| Interest Rate | Lower monthly payments | Rates now 2.25% vs 5% in 2023 |
| Prepayment Options | Pay off mortgage faster | 10-20% annual lump sum allowed |
| Fixed vs Variable | Payment predictability | 60% face increases; variable may drop 5-7% |
| Term Length | Flexibility at renewal | 5-year fixed up 15-20% at renewal |
| Portability | Transfer mortgage easily | No penalty when moving homes |
Beyond the mortgage itself, strengthening your overall financial position helps you handle whatever your renewal brings.
Aim to have three to six months of housing costs set aside. This buffer protects you if income fluctuates after your payments increase.
Additional income streams can offset higher mortgage costs. Whether through side work, rental income, or investment returns, extra money provides flexibility.
Review your recurring expenses for opportunities to cut costs. Even small savings add up. Consider earning cashback on gift cards for purchases you'd make anyway, putting money back in your pocket.
If you're first-time renting in Ontario while owning rental property, or considering converting a property, understand how different approaches affect your overall financial picture. Similarly, knowing the credit requirements for renting helps if you're ever in a position where you need to rent out your property or rent elsewhere temporarily.
Many homeowners sabotage their renewals through avoidable errors. Don't make these mistakes:
The biggest mistake: signing your lender's renewal letter without exploring alternatives. This single action costs Canadian homeowners thousands of dollars annually.
While rate matters most, ignoring other terms can hurt you. A slightly lower rate with restrictive prepayment terms might cost more than a marginally higher rate with flexibility.
Starting your renewal process late eliminates your and limits your options. You can't negotiate effectively when your current term expires next week.
If you have months before renewal, use them to improve your credit score. Even modest improvements can qualify you for better rates. Explore options like no credit check credit cards or easy approval credit cards if you need to build payment history quickly.
Read your renewal documents carefully. Look for changes in terms, fees, or conditions that differ from your original mortgage. Ask questions about anything unclear.
Your 2026 renewal is one event in your long-term homeownership journey. Think strategically about the bigger picture.
Consider where interest rates might be in three versus five years when choosing your term length. No one can predict rates perfectly, but thinking ahead helps.
As you pay down your mortgage and property values potentially increase, your equity grows. This equity creates options for future refinancing, home equity lines of credit, or eventual property upgrades.
Each renewal brings you closer to owning your home outright. Use prepayment privileges when possible to accelerate this timeline. Even an extra $100 monthly can save years of payments and thousands in interest.
Review the frequently asked questions about managing payments effectively, or explore our full library of articles for more financial guidance.
The mortgage renewal tips Canada homeowners need come down to preparation, comparison, and confident negotiation. Start early, know your numbers, shop aggressively, and don't accept your first renewal offer without exploring alternatives.
Your immediate action items:
If you're among the 1.15 million Canadians facing renewal in 2026, the time to prepare is now. Whether you're also interested in getting your first credit card to build credit, exploring guaranteed approval options, or looking at how credit cards for rebuilding credit might help your score before renewal - every financial decision connects to your overall mortgage readiness.
Neobanc helps Canadians maximize their financial potential through cashback on mortgage payments, bills, and more. When every dollar counts during your renewal period, earning rewards on payments you're already making just makes sense. Check out our about page to learn how we're helping Canadian homeowners keep more money in their pockets.
Facing higher rates in 2026? Neobanc members earn 0.5% cashback on every mortgage payment. Start offsetting renewal costs today.
Start Earning CashbackYou can typically begin shopping for mortgage renewal rates up to 120 days (four months) before your mortgage term ends without paying a penalty. This early start gives you time to compare rates from multiple lenders, improve your credit score if needed, and negotiate from a position of strength. Many lenders also allow you to lock in a fixed mortgage interest rate during this 120-day window to protect against potential rate increases.
Average monthly payments for 2026 mortgage renewals are estimated to be around 6% higher compared to December 2024 levels, though this varies significantly by mortgage type. Holders of five-year fixed-rate mortgages could see payments climb by 15% to 20%, while variable-rate fixed-payment borrowers might face increases greater than 40% in some cases. However, approximately 25% of Canadian mortgage holders are projected to see their payments actually decrease by the end of 2026.
As of January 29, 2026, the best high-ratio 5-year fixed mortgage rate in Canada is 3.84%, available across Ontario, Quebec, British Columbia, and Alberta. The best high-ratio 5-year variable rate sits at 3.35%. Compare these benchmark rates against your lender's renewal offer to determine if there's room for negotiation or if switching lenders makes sense.
Switching lenders can save borrowers $13,857 on average compared to renewing with their bank, according to Ratehub.ca. Consider switching if your current lender's renewal rate exceeds market rates by 0.20% or more, they won't negotiate despite your good payment history, or you need different features. However, factor in switching costs like legal fees ($500-$1,000), appraisal fees ($300-$500), and discharge fees ($200-$400) when making your decision.
Approximately 1.15 million Canadian mortgages will renew in 2026, with another 940,000 following in 2027, according to CMHC estimates. TD reports that 85% of mortgages renewing in 2025-2026 were opened when the Bank of Canada's key lending rate sat at or below 1%, meaning most borrowers secured their original terms in a dramatically different rate environment than today. This unprecedented volume creates both challenges and opportunities for homeowners who prepare early.
Start by reviewing your current mortgage statement to document your remaining balance, interest rate, term end date, and prepayment privileges used. Begin shopping for rates 120 days before your term ends and get quotes from at least three to five lenders to strengthen your negotiating position. Calculate your loan-to-income ratio (mortgage balance divided by annual gross income) and understand that ratios exceeding 4.5 may face more lender scrutiny.
No, approximately 60% of Canadian mortgages renewing in 2025 or 2026 will face higher monthly payments, but not everyone will experience increases. About 25% of mortgage holders are projected to see their payments decrease by the end of 2026, particularly those with variable-rate, variable-payment mortgages who could see payments decline by 5% to 7%. Interest rates fell to 2.25% by the end of 2025, down from 5% in 2023, helping to moderate payment increases.
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