2026 is the biggest mortgage renewal year Canada has ever seen. Nearly half of all Canadian mortgages — more than one million households — come up for renewal this year, and roughly 70% of all mortgages in the country will have renewed by the end of 2026. Many of those homeowners locked in rates of 2% or less back in 2020–2021, and about 60% of borrowers renewing in 2025 and 2026 are expected to see their payments go up.
Here’s the part many Canadians still don’t know: if you’re renewing in 2026, you may be able to switch to a completely different lender — for a better rate — without having to pass the mortgage stress test. That changes the renewal game entirely, and it means accepting your bank’s first offer could be the most expensive mistake you make this year.
What Changed: The Stress Test No Longer Applies to “Straight Switches”
The mortgage stress test requires you to qualify at the higher of 5.25% or your contract rate plus 2%. For years, it created a frustrating trap at renewal: your existing lender didn’t have to re-test you, but a competing lender did. Many borrowers who could easily afford their payments couldn’t “qualify” to move — so they stayed put and paid more.
That trap is gone. As of November 21, 2024, OSFI (Canada’s banking regulator) no longer requires the stress test when borrowers with uninsured mortgages (those who put down 20% or more) switch lenders at renewal in what’s called a straight switch. Borrowers with insured mortgages (less than 20% down) are exempt too, so the change now covers essentially everyone doing a straight switch at renewal.
To qualify as a straight switch, two things must stay the same:
- Your loan amount — you’re not borrowing additional money
- Your amortization schedule — you’re not stretching out the timeline
Keep those the same, and you can move your mortgage to whichever lender offers the best deal, qualifying at the actual rate you’ll pay — not an inflated test rate.
Why This Matters So Much in 2026
Two reasons: the renewal wave and today’s rate environment.
First, the sheer size of the 2026 renewal wave means lenders are competing hard for your business. With over a million mortgages up for grabs, banks know that borrowers can now walk — and that gives you real negotiating power for the first time in years.
Second, rates have come down meaningfully from their peaks. The Bank of Canada’s policy rate sits at 2.25%, and as of early July 2026, the best 5-year fixed rates are around 3.94–4.09% while 5-year variable rates are hovering near 3.45% — a nearly full percentage point gap between fixed and variable, the widest in years. If you’re renewing off a 2021 rate, your payment will likely rise. But the difference between your bank’s “posted” renewal offer and the best rate a broker can find across 90+ lenders can easily be half a percent or more.
What Half a Percent Actually Costs You
On a $400,000 mortgage with 20 years remaining, the difference between renewing at 4.5% and 4.0% is roughly $105 per month — about $6,300 across a 5-year term. That’s money your bank is counting on you leaving on the table when you sign their renewal letter without shopping around.
When the Stress Test Still Applies
The exemption is specifically for straight switches at renewal. You’ll still need to pass the stress test if you’re:
- Buying a home with a new mortgage
- Refinancing — increasing your loan amount to pull out equity
- Extending your amortization to lower your payment
- Adding or removing a borrower in some cases, depending on the lender
That said, even if your situation isn’t a straight switch, don’t assume you’re stuck. Qualification rules vary by lender, and a mortgage professional can often find options your bank never mentions.
How to Take Advantage at Your 2026 Renewal
- Start early. Most lenders let you lock a renewal rate 120 days (sometimes more) before your maturity date. If your renewal is coming up this fall, the time to shop is now — especially with the Bank of Canada’s next rate decision on July 15.
- Don’t sign the first renewal letter. Banks routinely send renewal offers above their own best rates, counting on convenience and inertia.
- Keep your loan amount and amortization unchanged if you want the stress-test exemption to apply.
- Have a broker shop the market for you. A licensed mortgage professional compares dozens of lenders at once — banks, credit unions, trusts, and monoline lenders — at no cost to you.
The Bottom Line
For the first time in years, renewing Canadians have genuine leverage. The stress test no longer locks you into your current lender, more than a million households are renewing in 2026, and lenders are competing for that business. The only borrowers who lose in this environment are the ones who sign the bank’s first offer without looking.
Renewing in 2026? Let’s make sure you’re not leaving thousands on the table. I’ll review your renewal offer and shop 90+ lenders to find your best rate — at no cost to you. Contact me or start your application today.
Ted Vailas is a Winnipeg mortgage professional with Dominion Lending Centres Mainstream Mortgages. Reach him at 204-890-2446 or ted@tedvailas.com.