Oct 3, 2026
If your mortgage is up for renewal in the next few months, the fixed rate you’re being offered today may already be higher than the one you saw in early September.
On Sept. 29, both CIBC and TD raised select fixed mortgage rates by 20 basis points (0.20 percentage points), mostly on 3- and 5-year terms. This move follows similar rate hikes in recent weeks by the other Big Six banks in Canada: BMO, National Bank, RBC and Scotiabank. Other lenders have also raised their rates by anywhere from 5 to 40 basis points.
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Here’s what’s prompting this decision, how it will impact you and ways to get ahead of it.
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Why are fixed rates rising if the Bank of Canada hasn’t moved?
Fixed mortgage rates don’t follow the Bank of Canada’s (BoC) policy rate — instead, they track Government of Canada bond yields, which reflect what investors expect from inflation.
The 5-year Government of Canada bond yield, a key benchmark for fixed mortgage pricing, hit a 52-week high of 3.729% on Sept. 28, eventually easing to 3.677% the next morning. Even with the favourable decrease, that number is still roughly 23 basis points above where it sat on Sept. 8, at 3.448%. The jump is part of a global bond selloff driven by fears that high energy prices will push inflation higher.
BoC held its policy rate at 2.25% on Sept. 2, its seventh straight hold. However, in a Sept. 21 speech, Governor Tiff Macklem warned that another rate hike might be possible if these current economic factors continue. “We don’t want to raise our policy rate and restrain growth if inflationary pressures are contained,” he said. “But nor do we want to be too slow to respond if inflationary pressures are becoming more persistent.”
The next rate decision is Oct. 28.
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What could a 20-basis-point increase cost you?
While it may seem small on paper, an increase adds up in practice. Consider this hypothetical example: a homeowner renews a $500,000 mortgage with a 25-year amortization. If their 5-year fixed rate jumps from 4.29% to 4.49%, their monthly payment will increase by roughly $55. Over a 5-year term, that’s nearly $3,300 more.
However, some lenders have raised their rates by double that amount, with rates having moved up more than once this year. Borrowers who waited could face an even bigger gap than before.
Who feels this most?
Those who are renewing are the most exposed group. Canada Mortgage and Housing Corporation projects about 1.15 million mortgages will renew in 2026 and another 940,000 in 2027.
Many of those borrowers locked in when rates were near record lows in 2020 and 2021. In a July 2025 analysis, BoC staff predicted that borrowers with a 5-year fixed mortgage renewing in 2025 or 2026 could see their payments rise an average of 15% to 20% compared with December 2024. That projection was based on the rate outlook from a year ago — before this fall’s jump in bond yields that widened the gap.
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Additionally, any first-time buyers shopping for a preapproval will also feel the sting, since a higher rate reduces how much they can borrow.
Should you go fixed or variable?
There’s no one right answer to this question. Variable rates are tied to the prime rate, which moves with whatever decision is made by the BoC. Since the Bank has held steady, the prime rate hasn’t changed.
However, variable rates come with their own risk. Desjardins Economics expects the policy rate to be held at 2.25% for the remainder of 2026, then rise 50 basis points in the first half of 2027.
On the other hand, a fixed rate offers payment certainty, which may be better suited for households with tight budgets. Borrowers who can absorb some payment swings may reach a different conclusion. And bond yields can plummet as quickly as they ascend, making it difficult to determine that today’s fixed rate is the peak.
What to do now
The Financial Consumer Agency of Canada advises borrowers to start shopping a few months before their term ends in order to find the best deal suited for their budget. Don’t wait for your lender’s renewal statement, as federally regulated banks are only legally required to send 21 days before your term ends. If you don’t act, your mortgage may renew automatically at a rate you may not be satisfied with — or worse yet, can’t afford.
Your renewal checklist:
- Ask your lender and at least one other financial institution or a mortgage broker for a rate hold
- Find out how long each rate hold will last and whether you’ll get a lower rate if they were to drop before closing
- Tell your current lender you’re shopping around and see if they can beat any other quotes you receive in your renewal letter
- If you switch lenders, ask for them to cover appraisal, discharge or legal fees
- Check whether you qualify for a straight switch without the stress test, which the Office of the Superintendent of Financial Institutions (OSFI) allowed for uninsured mortgages back in November 2024
- If you have any savings set aside, consider a lump-sum prepayment before renewal to shrink the balance you’re renewing
If your renewal is within the next four months, a rate hold costs you nothing and protects you from the next increase — get one in place before you decide to shop around or do anything else.
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Writer and editor based in Toronto with experience in personal finance, insurance, arts and culture and branded content.
