If your mortgage comes up for renewal this year, you’re in good company — and, unfortunately, in for some sticker shock. Canada’s long-anticipated renewal wave has officially peaked, with roughly 1.8 million mortgages renewing in the 12 months surrounding mid-2026. Most of those borrowers locked in five-year fixed rates of 2.5% or less back in 2020–2021. Today, the best five-year fixed rates sit around 4%.

The result? According to Ratehub, fixed-rate borrowers renewing this spring are paying an average of $622 more per month — a 24% jump. But here’s the good news: that “average” includes a lot of people who simply signed the renewal letter their bank mailed them. With the right strategy — and a recent rule change most homeowners don’t know about — you can renew for far less. Here’s how.

Why 2026 Renewals Hurt So Much

The math is simple, even if it isn’t pleasant. A homeowner who took a $500,000 mortgage at 2.5% in 2021 is renewing into a market where rates are roughly 1.5 percentage points higher. On that mortgage, moving from 2.5% to 4.0% adds roughly $300 or more to the monthly payment — more if your balance is larger or your original rate was lower.

The Bank of Canada has held its policy rate at 2.25% since October 2025, and most economists expect it to stay there through the rest of 2026 — with the next announcement coming July 15. That means the rates on offer today are likely close to the rates you’ll see at your renewal date. Waiting and hoping for a big drop is not a strategy.

The Rule Change That Works in Your Favour: No More Stress Test on Switches

This is the single biggest opportunity for 2026 renewers, and many still don’t know about it.

Since November 2024, OSFI no longer requires federally regulated lenders to apply the mortgage stress test when you switch lenders on a straight renewal of an uninsured mortgage — same balance, same amortization. Before this change, many homeowners felt trapped with their existing bank because they couldn’t requalify at the stress-test rate. Now you can shop your mortgage across every lender in the market without re-proving your income against a rate 2% higher than what you’ll actually pay.

Translation: your bank’s renewal letter is now competing with the entire market, whether they like it or not.

5 Ways to Pay Less at Renewal

1. Never sign the first renewal letter

Your lender’s renewal offer is rarely their best rate — it’s the rate they hope you’ll accept without shopping around. Signing it can also lock in the new (higher) rate immediately, costing you your remaining months at your old low rate. Read it, then set it aside.

2. Start 120 days early

Most lenders will hold a rate for up to 120 days. Starting four months before your renewal date lets you lock today’s rate as insurance — if rates rise before your renewal, you’re protected; if they fall, you take the lower one. Homeowners who wait until the final month almost always pay more.

3. Shop the switch

On a $600,000 mortgage, moving from a posted renewal rate of 5.25% to a discounted 4.60% saves roughly $3,900 a year — nearly $19,500 over a five-year term. A mortgage broker can shop dozens of lenders at once, including monoline lenders that often beat the big banks and cover switching costs.

4. Consider variable — the gap is the widest in years

The best five-year variable rates are around 3.45%, nearly a full point below fixed. With the Bank of Canada expected to hold steady, variable-rate borrowers keep that saving from day one — though you should be comfortable with the (small but real) risk of a hike in late 2026 or 2027.

5. Extend your amortization if cash flow is tight

If the new payment strains your budget, re-extending your amortization at renewal lowers the monthly payment. You’ll pay more interest over time, but you can shorten it again later with prepayments once rates or your finances improve. It’s a pressure valve — better than falling behind.

What This Means for You

A 2026 renewal doesn’t have to mean a $622 payment shock. The homeowners who pay the most are the ones who sign the first offer; the ones who pay the least start early, shop widely, and use the new no-stress-test switch rules to their advantage.

Your renewal is likely the single biggest expense decision you’ll make this year — it deserves more than a signature on a form letter.

Renewing in the next 12 months? Send me your renewal date and current rate, and I’ll shop the market for you — at no cost to you. Contact me here or call 204-890-2446 for a free renewal review.