Millions of Canadians face mortgage renewals in 2026 — and one wrong move could lock them into years of higher payments

BIG NUMBER: How many Canadian mortgages are up for renewal in 2026? About 1.2 million Canadian mortgages are expected to come up for renewal in 2025 and 2026 — reflecting the continued impact of 5-year fixed terms signed in 2021 (1).

What’s the outlook for mortgage rates in 2026?

Many Canadians want to know whether mortgage rates will rise, fall, or stay put this year.

As of January 28, 2026, the Bank of Canada (BoC) held its policy interest rate at 2.25% after months of stability. This policy decision directly influences borrowing costs across Canada. As Liam Hunt, freelance PR consultant, explained in an interview with Money.ca, “Holding the policy rate at 2.25% was a prudent move on the BoC's part given ongoing U.S. tariff and trade risks. This means that over the next couple of months, the status quo for borrowing costs will persist, so variable-rate mortgages and lines of credit tied to prime won't move.”

That stability means prime lending rates have also remained steady — currently around 4.45% in Canada.

Hunt adds, “Savings rates will also stay where they are. Since inflation is hovering around the BoC's 2% target, the central bank is happy to exercise patience rather than making cuts too hastily, since rate cuts may be deployed opportunistically later on in the event of new trade barriers. For now, though, we shouldn't see household budgets budge.”

What That Means for You

• Fixed-rate mortgage holders: Your rate won’t change until renewal.
• Variable-rate mortgage holders: With the policy rate on hold, your payments are unlikely to jump in the short term.
• If the Bank of Canada begins to cut rates later in the year, variable rates could fall first.
  
  

Tip #1 — Start early and shop around

A mortgage renewal is the perfect opportunity to align homeownership with future financial goals and current budget constraints. So, preparing for a mortgage renewal a few weeks or even a few months before your mortgage contract ends is best.

Steps to take early:

1. Contact your current lender to request your renewal offer.
2. Gather quotes from other lenders or work with an independent mortgage broker.
3. Compare not only rates but also terms, payment flexibility, and penalties.

Whether you select a variable or fixed-rate mortgage, you can find a mortgage contract that fits your financial goals by comparing payment frequency, loan terms, and mortgage rates.

“It takes less effort to renew with your current lender,” explains Jesse Abrams, founder and CEO of Homewise, a national digital homeownership platform, in an interview with Money.ca. “But seeing what other lenders offer could save you a lot of money.”

A small difference in rate can mean significant savings over time. For example, even a 0.50% difference on a $500,000 mortgage can lead to thousands in interest savings over the life of your mortgage.

As Abrams points out: “An hour of your time can save you thousands, so it’s worth it.”

Tip #2 — Think beyond the rate: Flexibility matters

To find the best mortgage renewal contract, you need to be clear about what’s changed and what could change in your life.

That means avoid fixating on the lowest rate, as this isn’t always the best choice. Before selecting a lender and finalizing a mortgage contract, consider your future:

• Planning a job change?
• Thinking about relocating?
• Adding family members?

More flexible options — including portability, shorter terms, or prepayment privileges — could save you money if your circumstances change. An independent mortgage broker can help match your needs to products from multiple lenders.

“When looking to renew your mortgage, it’s important to take a step back and look at your ambitions over the next five years,” explains Carissa Lucreziano, vice president of Financial Planning and Advice at CIBC Personal and Business Banking.

Everyone wants the best rate with some assurances, explains Abrams in an interview with Money.ca, but ignoring life circumstances can result in missed savings or higher fees.

That’s because big life events often impact living arrangements — and without planning, can result in high fees (often associated with breaking a mortgage).

For instance, if you think you might end up moving before the end of your mortgage term, then it may not be wise to lock in a fixed rate. Instead, look for variable-rate mortgages, shorter terms or a mortgage that offers portability — where you can move the mortgage to a new property.

“This is where an independent mortgage broker who works with multiple lenders can really help,” explains Abrams.

Given the increasing trend toward flexible financial planning, some lenders now offer more adaptable mortgage products tailored to changing lifestyles. Options like mortgage portability allow you to transfer your mortgage if you relocate, while flexible payment terms can accommodate unexpected changes in income or expenses. Considering these products at renewal could offer you greater freedom to adjust your mortgage without facing prohibitive penalties.

Tip #3 — Reconsider your amortization

At renewal, you can often reset your amortization period.

• Longer amortization = lower monthly payments but higher total interest over time.
• Shorter amortization = higher monthly payments but less interest overall.

Think of this as a temporary measure, ideal for those facing short-term financial strain but who still want to prioritize long-term financial goals.

Tip #4 — Stress test changes still matter

Until recently, any borrower renewing with a new lender would have to requalify using the mortgage stress test. But a federal government policy change that took effect in late 2023 meant that borrowers renewing with a new lender now skip the mortgage stress test. This change means greater competition among lenders, enabling borrowers to explore alternative options with potentially lower rates and better terms without worrying about requalifying using the more stringent stress test requirements. For those facing higher renewal rates, this policy shift offers a timely advantage, especially if you’re considering switching to a lender offering more flexible conditions or lower costs.

For more clarification, be sure to ask your mortgage broker.

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What does it mean to renew a mortgage?

Most people purchase property in Canada using a mortgage, and, in the vast majority of cases, this loan is repaid over a specific period of time (known as amortization). To make the loan manageable, the amortization is broken up into terms. Typical terms are usually between one and five years (but can go as high as 10 years). At the end of the contract, the homeowner must either repay the entire mortgage loan or negotiate a new mortgage contract. The process of negotiating another mortgage contract is known as a mortgage renewal.

What renewal actually means

When your mortgage term ends (usually every 5 years in Canada), you either:

• Renew your mortgage with your existing lender, or
• Switch lenders and negotiate a new contract.

This process doesn’t require you to repay your mortgage balance in full — only to agree to a new term and rate.

Most federally regulated lenders must provide your renewal documents at least three weeks before maturity. Proposed changes under the Canadian Mortgage Charter suggest expanding this notice to four to six months to give homeowners more time to shop around. This change is not yet law but reflects industry discussions (2).

Do mortgages automatically renew?

Yes and no. Some lenders automatically renew your mortgage even if you don’t respond to the renewal offer letter. However, this automatic renewal should be clearly stated in this offer letter.

While automatic renewal can alleviate stress, the renewal rates and terms may not be the same as your original loan contract and could be higher than what competitors might offer. To avoid higher costs, shorter loan terms and unfavourable conditions, it’s best to shop around.

Extended mortgage renewal notice period

Under a proposed update to the Canadian Mortgage Charter, lenders would be required to notify borrowers of upcoming mortgage renewal terms four to six months before the contract ends (rather than the current three weeks). This longer notice period gives you more time to shop around for competitive renewal terms, review your budget, and take steps to secure the best mortgage arrangement for your situation. This proposal highlights the importance of early renewal preparation in today’s mortgage landscape.

Can you be denied a mortgage renewal?

In Canada, it’s rare for a lender to deny a mortgage renewal to an existing borrower — but it can happen.

In most cases, a denied mortgage renewal occurs when there is a dramatic change to your financial situation, such as a job loss, or you repeatedly fail to make your mortgage payments.

"Everyone has a plan until you’re punched in the face.” – Jesse Abrams, CEO of Homewise (paraphrasing Mike Tyson)

If this happens, your options are to:

• Renegotiate with the same lender (but expect higher mortgage rates or an adjustment to the mortgage term or the overall amortization timeframe)
• Negotiate with a different lender
• Consider an alternative lender (just be sure to avoid unregulated private lenders)
• Work with a mortgage broker
  

“In these cases, an independent mortgage broker with access to various types of lenders can really help,” explains Abrams. Even when a borrower is denied a mortgage renewal at their current lender, there are loan options that don’t include predatory lenders.

“A lot of people feel like ‘bank’ means ‘best’ and, oftentimes, the bank isn’t the best,” explains Abrams. “Quite often, the most competitive mortgage contracts are offered by credit unions, smaller banks and mono-lenders — all lenders that spend far less on marketing their brand.” He adds: “Even a short-term loan contract with a B-lender can be a better option than a mortgage renewal with a potentially predatory lender.”

Is it worth it to renew your mortgage early?

If you’re concerned that interest rates will increase in the near future, then locking in a rate through an early renewal process can help. However, the benefit of an early renewal really depends on three factors:

• The mortgage rate offered on the renewal
• Mortgage terms
• Penalty costs associated with breaking your current mortgage contract

If a renewal rate is lower than your current rate (or the anticipated future mortgage rate), renewing your mortgage early can help save you money, but only if the penalty to break your current mortgage isn’t high. Always talk to your current lender about the penalty to break the mortgage and factor in these costs when calculating any potential savings.

Steps to renew a mortgage

The process of renewing a mortgage is the same as finding a mortgage, and that means everything is up for negotiation, including:

• Lender
• Contract term (length of time for current mortgage contract)
• Mortgage rate
• Prepayment privileges
• Potential fees, penalties and perks

To speed up the process, it helps to work with an independent mortgage broker.

“Working with a mortgage broker who is completely lender agnostic means the borrower’s needs take priority,” explains Abrams.