Quick answer at a glance
Quick Answer
- Most Canadians renewing in 2025 or 2026 are likely to see their mortgage payment rise.
- Borrowers coming off a five-year fixed rate typically face an average increase of about 15% to 20%, according to the Bank of Canada.
- On a $500,000 balance, that can mean roughly $400 to $600 more per month.
- Variable-rate, fixed-payment holders may instead see a small decline of around 5% to 7%.
- The exact amount depends on your balance, new rate, and term.
Why your renewal letter feels heavier this year
If you locked in your mortgage when rates touched record lows in 2020 or 2021, that five-year term is now ending. The renewal letter in your mailbox can look heavier than you expected, and that reaction is completely understandable.
You are far from alone. About 60% of all outstanding mortgages in Canada are set to renew across 2025 and 2026, so millions of households are facing the same question at the same moment: how much more am I about to pay?
The honest answer is that many people are renewing into a higher payment. The reassuring part is that the size of the increase is often smaller than the worst headlines suggest, and you have more control over it than you might think.
Find your renewal scenario in 30 seconds
5-year fixed (2020–21)
Expect the biggest change. Read the next two sections closely.
Variable, fixed payment
Your payment may move only slightly. Focus on the comparison.
Variable, adjusting payment
You have likely felt rate changes already, and renewal may bring relief.
Not sure of your numbers
You can get an instant pre-approval certificate to see your options before your renewal date.
What the average increase actually looks like
That gap between 6% and 20% is the part most headlines miss. The overall average is pulled down by variable-rate borrowers, many of whom may see their payments hold steady or fall. Five-year fixed holders coming off pandemic-era rates near 2% sit at the high end, because their old rate was unusually low.
A mortgage renewal is the point at which your current term ends and you sign a new agreement, usually at a new interest rate, for the remaining balance of your loan. Because today’s rates sit well above the lows of 2021, the new rate is often the single biggest driver of your payment change. You can review current rate details to see where pricing sits as of today.
Fixed, variable, and where you land
If you are weighing your next term, our guide to fixed vs variable rate mortgages breaks down the trade-offs in plain language.
| 5-year fixed | Variable, fixed payment | Variable, adjusting payment | |
|---|---|---|---|
| Payment direction | Up, often sharply (about +15 to 20%) | Resets to today’s rate and balance | Slightly down (about -5 to 7%) |
| Why | An old rate near 2% renews at today’s higher pricing | Payment stayed flat while rates rose, so more went to interest | The rate already climbed and has started easing |
| What to watch | Shop the market before accepting the renewal letter | Confirm your new payment and amortization at reset | Further rate cuts are not guaranteed |
Putting a real number on your own renewal
It helps to see the math on a real balance. Consider a homeowner who borrowed $500,000 at about 1.9% on a five-year fixed term in 2021, with a 25-year amortization. Their original monthly payment sat near $2,100.
Renewing at an illustrative 3.94%, roughly the best insured five-year fixed available as of April 2026, the new payment may land near $2,525 a month. That is about $425 more each month, or close to $5,100 over a year, for the same home.
These numbers are illustrative and use semi-annual compounding, the standard method for Canadian fixed mortgages. To estimate your own figure, our mortgage payment calculator lets you plug in your balance and a sample rate in a minute. Rates change daily, so treat any single number as a starting point, not a quote.
Your 120-day renewal game plan
- 1120 days outAsk your lender for their renewal offer and request a rate hold. A rate hold is a lender’s promise to reserve a specific interest rate for you, typically for 90 to 120 days, so a rise before your renewal date does not catch you off guard.
- 290 days outCompare that offer against what other lenders are pricing. This is where an independent broker shops 50+ lenders for you and brings back the sharpest available options. As Razi Khan, Founder and Mortgage Broker at Pegasus, often reminds clients, the first letter from your bank is an opening offer, not the best the market can do.
- 330 days outLock in your decision so the new term starts cleanly at maturity. A borrower who begins at 120 days has time to negotiate, gather documents, and switch lenders if the numbers favour it.
Levers that can lower your new payment
Even if your rate is higher than before, several levers can shrink the monthly impact.
- ✓Extend your amortization. Stretching the remaining years lowers each payment, though it raises the total interest you pay over time. For insured mortgages, rules from CMHC, Sagen, and Canada Guaranty can limit how far you extend, so check before you count on it.
- ✓Switch lenders at maturity. Moving your mortgage to a new lender at renewal typically does not trigger a prepayment penalty when done at the maturity date, and it can unlock a lower rate.
- ✓Negotiate, do not auto-accept. Your lender’s first offer is often a posted or loyalty rate, not their lowest. A competing quote gives you leverage.
- ✓Make a lump-sum payment before renewing. If you have savings set aside, reducing the balance before the new term starts lowers the payment that follows.
Our mortgage renewal payment shock guide covers these strategies in more depth.
Renewal mistakes that cost the most
- ✗Auto-renewing the first offer. The renewal letter is an offer, not the final word, and signing it without comparing is the most expensive habit.
- ✗Ignoring the rate-hold window. Waiting until the deadline removes your ability to shop or negotiate.
- ✗Assuming switching carries a penalty. Switching at maturity typically does not, yet many borrowers stay put because they assume it does.
- ✗Overlooking amortization. A small change to your amortization can ease a tight monthly budget.
- ✗Forgetting to compare lenders. Banks, credit unions, and trust companies price differently, and the gap can be meaningful.
- ✗Panicking. Most payment increases are manageable with a plan, and acting calmly beats reacting late.
If money is tight, read what happens if your renewal is denied so you know your options early.
Mortgage renewal questions Canadians ask
How much will my mortgage payment go up when I renew?
Why is my renewal payment so much higher than before?
Will my payment go down if I have a variable-rate mortgage?
Can I lower my payment by extending my amortization?
Is my bank's renewal offer the best rate I can get?
How soon before my renewal date should I start shopping around?
Does switching lenders at renewal cost me a penalty?
What can I do if I can't afford my new mortgage payment?
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About the author
Razi Khan
Founder, CEO & Licensed Mortgage Broker · Pegasus Mortgage Lending · Toronto, Ontario · FSRA Lic # 11479
Razi Khan is the Founder, CEO, and a licensed Mortgage Broker at Pegasus Mortgage Lending Center Inc., based in Toronto. With over 20 years of experience in the Canadian mortgage industry, Razi has personally guided more than 3,000 clients through some of the most complex and high-stakes financial decisions of their lives — from first-time purchases in the GTA to refinancing strategies, alternative lending solutions, and cross-border mortgages for Canadians buying in the United States.
Razi founded Pegasus in October 2008, launching the brokerage at the height of a global financial crisis. He works across the full spectrum of borrower profiles, with particular expertise in complex files including self-employed borrowers, credit-challenged clients, and investors building multi-property portfolios.
Learn more about Razi Khan →Sources & References
- Bank of Canada — How will mortgage payments change at renewal? An updated analysis (Staff Analytical Note 2025-21). bankofcanada.ca
- Ratehub.ca — Renewing your mortgage in 2026? Here’s what to expect (April 2026). ratehub.ca
- OSFI — Minimum qualifying rate for uninsured mortgages. osfi-bsif.gc.ca
- OSFI — Guideline B-20: Residential Mortgage Underwriting Practices and Procedures. osfi-bsif.gc.ca
- CMHC — Mortgage loan insurance. cmhc-schl.gc.ca