The Mortgage
Renewal Cliff Report 2026.
Canadians who locked in near 1.99% during the pandemic are renewing at roughly double that. Our illustrative scenario shows $479 more a month on a $500k mortgage — and $958/month more on a $1M mortgage.
The renewal cliff is real —
and documented.
The shock is real but manageable. The biggest mistake is auto-renewing without shopping the market.
The payment jump is real
A $500,000 five-year fixed signed at 1.99% in 2021 renews at roughly double that today. On our illustrative scenario the monthly payment rises by about $479 — a 23% jump — and the shock scales with your balance.
Pandemic rates vs. today
Rates near 1.99% in 2020–21 were generational lows. Five-year fixed renewal rates in 2026 are roughly double that. Every dollar still owing is amortized at the higher rate, which is why the monthly increase is so large.
Not a headline — a documented trend
Bank of Canada staff estimated in July 2025 that 60% of mortgage holders renewing in 2025–26 would see a payment increase, with five-year fixed borrowers facing an average rise of 15–20%. Our scenario models the sharper end of that range.
Your lender's offer is a starting point
Lenders are not obligated to offer their best rate at renewal. Shopping the market — or using a broker who compares 100+ lenders — can close part of the gap. The shock is real but partially manageable.
Three ways to
soften the shock.
Rate isn't the only lever. Amortization, prepayments, and term length all move the needle.
Shop before your maturity date
Federally regulated lenders must send your renewal statement 21 days before term end, but you can engage a broker months earlier. Most lenders will match or beat a competing commitment letter, giving you real leverage without switching.
Model every lever — not just rate
Extending your amortization reduces the monthly payment even at a higher rate. A lump-sum prepayment before renewal shrinks the balance — and therefore the shock. A shorter or variable-rate term may also suit your timeline. We model each combination against your actual numbers.
Let a broker run the comparison — free
We compare your lender's renewal offer against 100+ lenders, compute exact payment scenarios, and present the math side by side. No obligation, no fee on A-lender renewals. We'll try to beat your rate. If we can't, we pay you $500. Conditions apply.
We can help across
many scenarios.
Tap any situation below to see how we approach it.
If you’re…You locked in at a pandemic low (~2%) in 2021
You locked in at a pandemic low (~2%) in 2021
This report's headline scenario. We benchmark your lender's offer against 100+ lenders and compute every option — term length, amortization extension, prepayments — to find the lowest net-of-fees payment available to you.
Model my renewalIf you’re…You locked in near the 2023 peak (4.5%–5.5%)
You locked in near the 2023 peak (4.5%–5.5%)
Breaking early may save money if today's rate is materially lower and the penalty breaks even within 12–18 months. We compute your exact IRD or 3-month-interest penalty before you commit to anything.
Run the break-evenIf you’re…You want to lower your monthly payment
You want to lower your monthly payment
Extending the amortization — up to 30 years on an uninsured renewal — reduces the monthly payment even at a higher rate. We model the total interest cost tradeoff so you choose with the full picture.
Model my paymentsIf you’re…You want to make a lump-sum prepayment before renewal
You want to make a lump-sum prepayment before renewal
Prepaying before the term ends shrinks the renewal balance — and the renewal shock with it. Most lenders allow 10–20% annually without penalty. We confirm your limit and model exactly what it saves.
Check my prepayment roomRenewal payment shock
by mortgage size.
Assumptions set September 24, 2026. Illustrative estimates — your figure depends on your balance, rate and remaining amortization.
Modelling assumptions
| Original mortgage | $400,000 / $500,000 / $750,000 / $1,000,000 (one row each) |
|---|---|
| Original contract rate (2021) | 1.99% five-year fixed, illustrative of pandemic-era discounted rates |
| Amortization | 25 years; 20 years left at renewal |
| Balance at renewal ($500k example) | $418,763 after 5 years of payments |
| Renewal rate | Assumed 4.29% five-year fixed, set September 24, 2026 (modelling assumption, not a quote; uninsured renewals often price higher than insured) |
| Math | Canadian semi-annual compounding, monthly principal-and-interest payments |
For reference, the lowest 5-year fixed renewal rate on our live rate board is 4.14% as of October 23, 2026 (best-in-network pricing for a strong file, usually insured or insurable; uninsured and lender renewal offers are often higher). Shown for context — it does not change the figures below.
Monthly payment: before vs. after renewal
5-year fixed at 1.99% on a 25-year amortization, renewing at an assumed 4.29% with 20 years left.
| Original mortgage | Payment at 1.99% (2021) | Payment at assumed 4.29% | Increase / month | Increase / year |
|---|---|---|---|---|
| $400,000 | $1,692 | $2,075 | +$383 (+23%) | +$4,596 |
| $500,000 | $2,115 | $2,594 | +$479 (+23%) | +$5,745 |
| $750,000 | $3,172 | $3,890 | +$718 (+23%) | +$8,618 |
| $1,000,000 | $4,230 | $5,187 | +$958 (+23%) | +$11,490 |
Figures are computed from the assumptions above using standard Canadian semi-annual-compounded mortgage math. The 1.99% rate is illustrative of discounted 2021 five-year fixed rates; the 4.29% renewal rate is a modelling assumption set September 24, 2026, not a live or quoted rate. Analysis by Mortgage Squad Advisors (FSRA #13737).
- How will mortgage payments change at renewal? An updated analysis (Staff Analytical Note 2025-21, July 2025), Bank of Canada.
- Renewing your mortgage, Financial Consumer Agency of Canada.
Journalists and editors are welcome to cite this report with attribution to Mortgage Squad Advisors and a link to this page. We’re happy to provide interviews, custom figures, or a licensed broker to comment.
Renewal questions,
clear answers.
Payment shock, penalties, amortization, prepayments — answered plainly.
How much will my mortgage payment go up at renewal in 2026?
On this report's illustrative scenario (a $500,000 five-year fixed signed at 1.99% in 2021, renewing at an assumed 4.29%), the payment rises about $479 a month ($5,745 a year), roughly a 23% increase. On $1,000,000 it's about $958 a month. Bank of Canada staff estimated average increases of around 15% to 20% for five-year fixed borrowers renewing in 2025 or 2026. Your figure depends on your balance, rate and remaining amortization.
Why is the increase so large?
Because many borrowers locked in at pandemic-era lows around 1.99% in 2020 and 2021, and five-year fixed rates in 2026 are roughly double that. This report assumes 4.29% at renewal. The same balance amortized at the higher rate produces a materially higher monthly payment. Check today's rates on our live rate board.
What can I do to soften the renewal payment shock?
Shop the market rather than auto-renewing your lender's first offer; ask whether the amortization can be extended to lower the monthly payment; consider a shorter term if you expect rates to fall; and make lump-sum prepayments before renewal to shrink the balance. A broker can model each option against your numbers.
Should I break my mortgage early to lock a lower rate?
Only if the interest you'd save beats the penalty plus fees. For a 2021 borrower whose rate is below today's rates, breaking early usually brings no rate saving. For someone who signed near the 2023 peak, a Big-6 posted-rate IRD penalty can be large; see our Big Bank Mortgage Penalty Report and run the break-even before deciding.
We’ll try to beat your rate.
If we can’t, we pay you $500.¹
¹ Rate Beat: eligible Big-6 bank written offers only · same product, term & amount · $500 paid to you or your nominated charity at closing · conditions apply
Bank of Canada staff estimated in July 2025 that about 60% of mortgage holders renewing in 2025 and 2026 would see a payment increase, and that borrowers with a five-year fixed contract renewing in those years could face an average increase of around 15% to 20%1. Federally regulated lenders must send your renewal statement at least 21 days before the term ends2, but you can shop well before that. See our Big Bank Mortgage Penalty Report and the payment shock calculator.