Renewing Your Mortgage in Canada: A 2026 Guide for Homeowners and Landlords

This article is general information, not financial advice. Rates and rules change; confirm the current details with your lender, a licensed mortgage professional, or the primary sources linked below before you decide.

If your mortgage comes up for renewal in the next couple of years, you are in a very large crowd. The Bank of Canada estimates that about 60% of all outstanding Canadian mortgages renew in 2025 or 2026 (Bank of Canada, Staff Analytical Note 2025-21). Many of those were locked in during the record-low-rate window of 2020 and 2021. Renewing today usually means letting that rate go.

The good news: the picture is less uniformly grim than the headlines suggest, and a quiet 2024 rule change made it much easier to shop your renewal around. Here is what is actually happening, and what to do about it.

How big is the payment shock, really?

It depends heavily on what kind of mortgage you have. Do not let one scary average stand in for your situation.

Five-year fixed holders renewing in this window face the biggest jump: the Bank of Canada estimates an average payment increase of roughly 15% to 20% versus their December 2024 payment, with 2026 renewals near the top of that range. Five-year fixed is about 40% of all Canadian mortgages, and about three-quarters of everyone facing an increase holds this product.
The blended average across all renewing mortgages is smaller: about 10% higher for 2025 renewals and about 6% higher for 2026, because the fixed-rate increases are averaged against variable-rate decreases.
Variable-rate, variable-payment holders could actually see their payment fall by roughly 5% to 7% as the Bank of Canada's earlier rate cuts flow through.

All of those figures are from the same Bank of Canada analysis. The key point: the "renewal cliff" is real for five-year fixed borrowers, but it is not everyone's story.

For scale, CMHC's renewal-wave analysis frames it as roughly 1.5 million households having already renewed at higher rates, with about a million more to come, and notes the 2026 cohort is smaller than 2025's. CMHC's own 2026 consumer survey reported renewing homeowners saw monthly payments rise by an average of about $375, though that is a survey average, so treat it as a directional benchmark rather than a number that applies to you.

Want your own figure instead of an average? Run it through our mortgage renewal calculator.

The rule change that quietly helped you: switching lenders got easier

Here is the most useful thing to know before you renew, and most people still do not know it.

Since November 21, 2024, you can move an uninsured mortgage to a new lender at renewal without re-passing the federal stress test, as long as it is a "straight switch." The banking regulator, OSFI, stopped requiring the Minimum Qualifying Rate (MQR) on these switches (OSFI guidance). The federal government made a parallel change for low-ratio insured mortgages effective December 16, 2024 (Department of Finance Canada).

Why this matters: renewing with your current lender never triggered the stress test. But before this change, moving to a new lender was treated like a brand-new mortgage, so it did trigger it. Borrowers who could no longer pass the test were effectively trapped with their existing lender, which is a weak spot to negotiate from. That trap is now gone for straight switches.

Two things to get right:

A "straight switch" is narrow. It means no increase in your loan amount (your balance can rise by up to $3,000 to cover penalties and fees, but no equity take-out) and no increase in your amortization period. Change either of those and it becomes a refinance, which is not covered.
The stress test is waived, not the whole approval. The new lender still underwrites you: income, credit, and serviceability all still apply. What is gone is only the MQR hurdle, which is the greater of your contract rate plus two percentage points, or 5.25%.

Renewal is not the same as refinance

These get blurred, and the difference decides which rules apply.

Renewal: a new term on your remaining balance, with the same loan amount and amortization. This is where the straight-switch stress-test waiver lives.
Refinance: changing the loan itself, by borrowing more, extending the amortization, or pulling out equity. A refinance triggers full requalification, including the stress test, and can trigger a new mortgage-insurance premium.

If all you are doing is continuing your existing mortgage on better terms, you are renewing, and the easier switch rules apply.

Staying put vs. shopping around

Stay with your current lender: simplest path, no requalification. The risk is passivity. If you do nothing, your term can auto-renew at the lender's posted (undiscounted) rate, which is rarely the best deal. The federal consumer agency is blunt about this: negotiate, and shop before you sign (FCAC, Renewing your mortgage).
Switch to a new lender: the new lender must approve your application, but a qualifying straight switch skips the stress test. Watch for a collateral-charge mortgage, which can be more expensive to move because the charge has to be discharged and re-registered. Many lenders will cover switch costs to win your business, so ask.

How to shop your renewal without leaving money on the table

Start early. Federally regulated lenders must send your renewal statement at least 21 days before your term ends, and cannot raise the offered rate before your renewal date. But 21 days is not much runway. FCAC's advice is to start a few months out and not wait for the letter.
Use a rate hold. Lenders commonly let you lock a rate up to about 120 days before maturity. That is an industry norm, separate from the 21-day statement rule. A rate hold guarantees the rate pending full approval; it does not guarantee approval.
Get competing quotes. With the switch rules relaxed, a quote from another lender is both a real option and leverage with your current one.

Fixed vs. variable in 2026

Rates move, so treat this as a framework rather than a prediction. As of its June 10, 2026 decision, the Bank of Canada held its policy rate at 2.25%, one of several holds in 2026 after the easing cycle that began in 2024 (Bank of Canada). What the rate does next is not something anyone can promise you.

The durable trade-offs:

Fixed gives you payment certainty for the whole term and shields you from future increases, but you commit to today's rate and usually face a larger penalty (an interest-rate differential) if you break early.
Variable moves with your lender's prime rate, which tracks the Bank of Canada. It benefits if cuts resume and hurts if rates rise, and it usually carries a smaller break penalty (often about three months' interest), so it is easier to change later.

With the Bank paused near the end of an easing cycle, the live question for many renewers is less "fixed or variable" and more "how long to lock." Some borrowers choose a shorter fixed term (one to three years) as a bridge, planning to re-price sooner rather than commit to a long term at an elevated rate. That is one documented strategy, not a recommendation: shorter terms sometimes price higher than five-year terms, and you renew again sooner into unknown rates.

A note for landlords

If you own rental property, a renewal at a higher rate lands straight on your cash flow and your effective return. The move that saves the most stress is unglamorous: model the new payment before it hits, against your actual rent and expenses, so a renewal is a planned event rather than a surprise. The shopping and straight-switch advice above applies to you too. Keeping clean, current records for each property (rent, expenses, and financing) is what makes that modelling fast instead of a spreadsheet archaeology project, which is exactly what Habyn helps landlords do.

Frequently asked questions

When should I start on my renewal? A few months before your term ends. You can often lock a rate about 120 days out, and your lender must send a renewal statement at least 21 days before maturity. Do not wait for the letter to start comparing.

Can I really switch lenders without the stress test? For a qualifying straight switch, yes, since November 21, 2024 for uninsured mortgages (and December 16, 2024 for low-ratio insured). "Straight switch" means no more borrowing and no longer amortization. The new lender still checks your income and credit; only the Minimum Qualifying Rate is waived.

Is renewing the same as refinancing? No. Renewing continues your existing balance on a new term. Refinancing changes the loan (more money, longer amortization, or equity out) and does require full requalification, including the stress test.

Will my payment definitely go up? Not necessarily. Five-year fixed holders renewing in 2025 to 2026 face the largest increases (roughly 15% to 20% on average), but variable-rate borrowers may see decreases. Your result depends on your product and your original rate.

Should I go fixed or variable? That depends on your tolerance for payment changes and how long you want certainty, not on a rate forecast. Fixed buys certainty and a bigger break penalty; variable offers flexibility and a smaller one.

Building or growing a property portfolio in Canada? Habyn helps homeowners and small landlords keep clean records and see the real numbers behind every property, so a mortgage renewal is a decision you plan for, not a bill that surprises you. See how Habyn helps homeowners.