Mortgage Renewal Strategies for 2026: How to Save Money

If your mortgage is coming up for renewal in 2026, you are not alone. Canada is facing

a massive renewal wave. Over one million mortgages are expected to renew in 2026.

Many Canadians who secured 5-year fixed or variable mortgages in 2020–2022 are

now seeing rates reset higher, leading to potential monthly payment increases of 10% to

20% on average for fixed-rate borrowers.

The good news? The lowest rates for insured mortgage are now below 3.50%.

Mortgage rates have dropped since last year and are now lower than they have been

since 2022. This reduces the potential ‘payment shock’. News headlines overstate the

risk to Canadians of this renewal wave. It is manageable for most of us and the

payment increase most will face hardly amounts to a ‘shock’.

You still have time to make this renewal much less painful and optimize your outcome

by making some smart choices (and in some cases, actually save money).

What Is a Mortgage Renewal and Why Does 2026 Feel Different?

Payment increases will be common in 2026 mortgage renewals, but proactive steps like

shopping rates early can minimize or avoid payment shocks.

At the end of your mortgage term (usually 5 years), you must renew, refinance, or pay

off the balance. Renewal means signing a new term with your current lender or

switching to a better one. A mortgage switch happens when you simply change lenders

for a new rate but don’t change any of the mortgage details, like the balance and the

remaining amortization.

2026 stands out because:

Of the large number of mortgages renewing during the year.
Many renewing mortgages were originated at sub-2% rates during low-rate periods.
Current best rates (3.35% to 4.20% range) mean higher payments for most.
Regional pressures show in Toronto and Vancouver, where arrears are rising modestly but still low overall.

Here’s exactly what you need to know and do in 2026.

Quick Answers Regarding Your Mortgage Renewal in 2026

1. Will my mortgage payment go up significantly in 2026?

If you are renewing a mortgage that was originated in the second half of 2022 or later, you may not have an increase. If your mortgage was started before that, such as a five-year mortgage that began in 2021 then yes, you will likely see a payment increase.

The amount depends on:

When you originally locked in
How much is left on your mortgage
Current rates at renewal time
Whether you switch lenders or not

2. Are mortgage rates going to drop more before my renewal?

Probably not, if at all. Most experts expect the Bank of Canada to maintain rates at their current levels for most of 2026. Bond yields are the same as they were in the spring of 2025, demonstrating how they have stabilized and levelled off.

That means the best rates for both 5-year fixed, and 5-year variable mortgages will most likely stay in their current range for the foreseeable future.

3. Can I avoid a big payment increase on a mortgage renewal?

For those that took out a mortgage in 2021 or early 2022, a payment increase in 2026 is inevitable. However, you can minimize this increase by implementing the right strategy.

The 5 Smartest Mortgage Renewal Strategies for 2026

1. Shop Around & Switch Lenders (The #1 Money Saver)

You are not required to stay with your current bank or mortgage lender. At the very least, do not accept their first offer and simply sign back their initial renewal letter.

In 2025 and early 2026, we’ve already seen a significant percentage of renewing homeowners switch in order to achieve a better rate, better mortgage terms, and greater flexibility.

Your current lender will provide you with an offer. If you find a better rate from a different lender why not give that lender your business? You'll save money and you'll know you're dealing with a lender that is more competitive for your business now and in the future when you renew your mortgage.

Switching can easily save you thousands of dollars over the next 5 years.

Pro tip: Start looking at least four months before your renewal date to give yourself enough time to prepare and make the switch.

2. Extend Your Amortization, but be aware of the trade-offs

Many people are choosing to extend their amortization when renewing. This comes at the cost of increasing the total amount of interest they will pay over time. If you expect to be able to manage the amortization back down in the future, this can decrease your mortgage payment and lower your financial stress much sooner.

3. Switch to a Variable-Rate Mortgage (If You’re Comfortable)

Variable mortgage rates are currently lower than fixed mortgage rates. Makes guesses about where interest rates are going can be risky and variable-rate mortgages can cost more money if rates unexpectedly increase. But if you can handle that risk or you strongly believe rates will stay stable or drop then a variable rate mortgage might make sense and get you the lowest rate possible.

Important: Only do this if you can handle potential rate increases later on.

4. Improve Your Financial Position

Boost your credit score, reduce debt, and document income stability. This strengthens qualification for better rates and ensures you are prepared to take advantage of lower rate opportunities, especially if you're self-employed or in a unique situation.

5. Use a Mortgage Broker

A good mortgage broker can:

Access rates most banks don’t advertise
Negotiate on your behalf
Handle the paperwork
Usually do it all at no cost to you

The potential savings outweigh any hassles of dealing with someone new. Good mortgage brokers also provide expert advice and can help you optimize your mortgage strategy over time.

Real 2026 Renewal Example

The Classic Case:

Original mortgage: 2021 at 1.79%
Original Balance: $450,0000
Balance at renewal: $375,000
Renewal offer from the bank in 2026 for 5-year fixed = 3.99%

→ Monthly payment increases from $1,860 on the original mortgage to $1,970 for the renewal mortgage. This may not seem like a large increase when thinking of only a single monthly payment, but the extra $110 per month adds up to $6,600 in additional cash flow spent on the mortgage over the five-year term of the mortgage.

This customer decides to shop around, finds a better rate with a different lender at 3.74% and decides to make the switch.

→ Monthly payments now increases from $1,860 to $1,920. The monthly payment increase is now only $60, reducing the total additional cash flow required over the five-year term of the mortgage to $3,600. This is a savings of $3,000.

There may be a few hundred dollars of expenses to complete a mortgage switch and the savings in this example more than offsets the cost. Optimizing your mortgage renewal outcome can produce material savings over time.

When Should You Start Thinking About Mortgage Renewal?

Here is a recommended timeline:

- 150 to 120 days before renewal → Start casual conversations

- 120 to 90 days → Get quotes, compare seriously

- 90 to 60 days → Lock in your best rate

- 60 to 30 days → Final paperwork & commitment

Waiting until the last month almost always costs you more money and will add to your stress level. Remember that even if you lock in a rate early and rates subsequently decline before your mortgage funds, the lender will give you the lower rate available at funding.

Bottom Line - 2026 Mortgage Renewal Summary

The 2026 mortgage renewal wave is real but the risk to the overall market is overblown. Rates today are competitive and historically normal.

If your mortgage is renewing in 2026, you will most likely see a payment increase. The size of the increase is completely dependent on the choices you make over the next few months.

The people who will come out ahead in 2026 will:

Shop around early
Compare multiple lenders
Consider switching
Talk to an experienced mortgage professional

Want to know exactly what your renewal options are right now? At Frank Mortgage we help borrowers navigate renewals every day. We'll show you where and how to find competitive rates, how to make a mortgage switch, ways to plan ahead to avoid surprises and how to get the best outcomes.

Drop us a quick message or book a 15-minute call. We’ll run your personalized numbers and show you every possible path (including the ones that could save you the most).

No pressure. No obligation. Just real numbers so you can make the smartest decision.

Let us do the work to help make your 2026 renewal way less stressful than it need otherwise be.

FIND GREAT RATES

BOOK A CONSULTATION

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About The Author

Don Scott

Don Scott is the founder of a challenger mortgage brokerage that is focused on improving access to mortgages. We can eliminate traditional biases and market restrictions through the use of technology to deliver a mortgage experience focused on the customer. Frankly, getting a mortgage doesn't have to be stressful.

Connect with Don on LinkedIn!

Mortgage Rate Forecast For 2026

By George Holicka • January 27, 2026

What are Canadian mortgage rates going to do in 2026? We expect mortgage rates to remain fairly stable through 2026. We think that the Bank of Canada will hold rates steady for much of the year, though some analysts are calling for hikes in the latter half of the year. Bond yields are also expected to remain stable, meaning that fixed mortgage rate should not move much. Predictions are difficult and the markets are sending mixed signals right now. Read on to find out what this might all mean? 2026 Mortgage Rate Prediction Mortgage rates should remain within a close range near current rates for most of 2026. Variable mortgage rates will follow the Bank of Canada rates, which are expected to remain flat for the first half of the year. Bond yields could fluctuate with economic news and fixed mortgage rates will follow but are likely to remain within the high-3% to mid-4% range, absent any significant economic surprises. Variable Mortgage Rates in 2026 We expect variable mortgage rates to remain mostly unchanged in 2026, potentially increasing by 0.25% to 0.50% if the Bank of Canada hikes toward year-end. The one huge caveat to this is that if the ongoing trade discussions with the US go poorly, weakening Canada’s economy, there may be an incentive for the Bank of Canada to make some cuts, as long as inflation remains under control. We do not hope for this poor economic news so prefer to not predict it to be likely. Variable mortgage rates are now below fixed mortgage rates and should remain there for the time being. We anticipate five-year variable mortgage rates for the best borrowers to range from 3.4% to 4% throughout the year, depending on any policy shifts. Fixed Mortgage Rates in 2026 We do not expect much change in fixed mortgage rates in 2026, but there is a risk that fixed rates could increase. Bond yields have already priced in limited Bank of Canada cuts and have been stable lately. The recent stability in the US 10-year Treasury yield around 4.2% suggests the bond market is cautious about further cuts. In Canada, bond yields are exactly where they were one year ago, with the five-year Canada bond at 2.88% in late January 2026. We must pay heed to those signals since fixed mortgage rates depend on the bond market. We anticipate five-year fixed mortgage rates to range between 3.7% and 4.3% for most of the year. We rely on market inputs to generate our own expectations for mortgage rates in 2026. Those key inputs include: The Bank of Canada has indicated the current overnight rate of 2.25% is "about right" to keep inflation near 2%, but stands ready to respond if needed; Economists are forecasting moderate Canadian economic growth, which may not require further stimulus; The US Federal Reserve is expected to cut rates gradually in 2026, potentially two to three times, but with uncertainty from trade policies; The US 10-year Treasury yield has hovered around 4.2% in early January 2026; Canadian 5-year bond yields are around 2.88% in late January 2026, flat to a year ago and showing no signs of a downward trend; and Excessive government borrowing puts pressure on bond yields to rise to entice investors to buy the large volume of government debt There are many risks that are not priced in yet that could materialize. Economic weakness or tariff impacts could prompt more rate cuts and lower bond yields. The trade agreement between Canada, Mexico and the US expires this year and needs to be renegotiated. Economic strength or resurgent inflation could lead to hikes and higher rates. There are also political and geopolitical risks that are making headlines that are not in our area of expertise. They are difficult to predict but could significantly impact our interest rate markets in 2026, a year currently marked by uncertainty. What Happened to Mortgage Rates in 2025? In 2025, Canadian fixed mortgage rates remained relatively stable, declining by a modest 0.20% through the year. Canadian variable-mortgage rates declined by 1.0%, in lockstep with the Bank of Canada reducing their target rate by the same amount in 2025. The Canadian market entered 2025 with expectations for gradual Bank of Canada cuts, which materialized with reductions totaling 1.00% from January through October. The first cuts came in January and March (0.25% each), followed by holds through summer, then additional 0.25% cuts in September and October. The end result was a reduction in the overnight rate to 2.25% where it remains as we embark on a new year in 2026. The Bank of Canada rate cuts in 2025 had the expected direct impact on variable mortgage rates, which dropped by the same amount. Fixed rates are ‘forward-looking’, so they moved in anticipation but stabilized as cuts slowed. As the chart shows, fixed mortgage rates have levelled off over the past year.