If your mortgage is renewing in 2026, you’re not alone — and you’re likely in for a payment shock. Hundreds of thousands of Ontario homeowners who locked in at pandemic-era rates of 1.5%–2.5% are now renewing into a world where even the best rates start above 3.3%. Here’s what to expect and how to prepare.
The Scale of the Renewal Wave
Approximately 33% of all Canadian mortgage holders are expected to face renewal in 2026 — many for the first time since rates began rising in 2022. About 75% of those renewing hold 5-year fixed-rate mortgages, meaning they locked in at historically low rates between 2020 and 2021. Payment increases for this group are expected to average around 20% compared to their previous term.
A Real-World Renewal Scenario
Consider an Ontario homeowner who in 2021 locked in a $500,000 mortgage at 2.0% fixed for 5 years on a 25-year amortization. Their monthly payment was approximately $2,119. Renewing today’s remaining balance (~$440,000) at the current best 5-year fixed rate of 4.04% brings the monthly payment to approximately $2,630 — an increase of over $500/month.
Fixed vs. Variable at Renewal: The 2026 Decision
This is the most consequential choice at renewal:
- 5-Year Fixed (4.04% at brokers): Predictability and protection against potential rate hikes. Markets currently show a 75% probability of at least one BoC rate increase by end of 2026 due to oil price and inflation pressures. A fixed rate insulates you from this risk for five years.
- 5-Year Variable (3.35% at brokers): Lower starting rate — roughly 0.70% below fixed. If the BoC holds or cuts, variable wins. But if hikes materialize, your payment rises with each BoC move.
- Shorter Terms (1–3 year fixed): Worth considering if you believe rates will be lower in 1–3 years. However, most major bank forecasts do not anticipate significant cuts in 2026.
Don’t Renew With Your Existing Lender Without Shopping First
Many Canadian homeowners accept their lender’s renewal offer without negotiating or comparing alternatives — and leave significant money on the table. Your lender’s posted renewal rate is rarely their best rate. Mortgage brokers routinely access rates 0.3%–0.7% lower than bank posted rates. On a $440,000 mortgage, a difference of just 0.5% translates to over $10,000 in interest savings over a 5-year term.
Key Renewal Timeline — When to Start
| Time Before Renewal | Action |
|---|---|
| 120 days out | Start shopping. Most lenders allow a rate hold 120 days before renewal — lock in today’s rate as a floor. |
| 90 days out | Contact a mortgage broker. Get quotes from multiple lenders, not just your current one. |
| 30–60 days out | Negotiate. Use competing offers to push your existing lender for a better rate before switching. |
| Renewal date | Sign with the best offer. Switching lenders at renewal typically has no penalty. |
Variable-Rate Holders: Your Situation Is Different
If you’ve been on a variable or adjustable-rate mortgage through 2022–2025, you’ve already absorbed most of the rate-hike pain. Those with adjustable-rate mortgages (ARM) where payments moved with the prime rate have been paying higher amounts throughout. As of today, variable rates at 3.35% are lower than fixed — and if the BoC holds through 2026, variable borrowers may finally see some relief relative to fixed-rate peers.
Bottom Line
Renewing in 2026 means accepting a higher rate than your previous term — there’s no avoiding that. But shopping early, comparing brokers vs. banks, and choosing the right term for your situation can make a significant difference. Don’t let your lender auto-renew you at a posted rate. Take control of your renewal.
See today’s best Ontario renewal rates at mrates.ca — updated daily.