If your mortgage is coming up for renewal this year or next, you're not alone , and the number is bigger than most people realize. According to Canada Mortgage and Housing Corporation, roughly two million mortgages are hitting renewal between 2025 and 2026 alone, the vast majority of which were originally locked in when the Bank of Canada's policy rate sat at or below 1% (CMHC Residential Mortgage Industry Report, via reporting). Many industry analysts now describe over half of all Canadian mortgages as renewing somewhere between 2025 and 2027.
This is the "mortgage renewal cliff" , and for GTA homeowners carrying some of the largest mortgage balances in the country, it's worth understanding in detail.
Why This Is Happening
Between 2020 and 2022, the Bank of Canada cut its policy rate to historic lows to support the economy through the pandemic. Five-year fixed rates dipped below 2%, and variable rates fell under 1.5% (analysis via Placer Real Estate). Homeowners who bought or refinanced during that window locked in payments based on those rates for a five-year term. As those terms mature in 2025-2027, borrowers are renewing into a rate environment that, while it has cooled from its 2023 peak, remains meaningfully higher than what they signed up for.
What the Numbers Actually Look Like
Real examples from 2026 renewal data give a sense of scale. Ratehub.ca's analysis of a $537,313 mortgage balance renewing into a 5-year fixed rate found the new payment increased by roughly 24%, or about $622 more per month (Ratehub.ca). Variable-rate borrowers have generally already absorbed most of the increase gradually as their rate floated, so their renewal "shock" tends to be smaller , closer to a 1% payment increase in similar analyses.
Five Strategies for Homeowners Facing Renewal
- Start shopping 90-120 days before your renewal date. You are not obligated to accept your current lender's renewal offer, and lenders often quote existing customers a rate slightly above what they'd offer a brand-new client.
- Get a real mortgage broker involved. A broker can shop your file across dozens of lenders simultaneously rather than you calling banks one by one.
- Consider extending your amortization at renewal if the new payment strains your budget , this can meaningfully lower the monthly hit, though it costs more in total interest over time.
- Make lump-sum prepayments now if your current mortgage allows it and you're still 6-12 months from renewal , every dollar off the principal reduces the balance being repriced at the new, higher rate.
- Talk to a real estate professional about your equity position before you sign anything. In some cases, downsizing, renting out a portion of the home, or refinancing against built-up equity is a better move than simply absorbing the new payment.
The Bank of Canada Backdrop
As of 2026, the Bank of Canada's policy rate sits in the low-2% range, with most analysts not expecting further cuts and some forecasting the next move could be a hold or even a hike depending on inflation data (overnight rate details, Bank of Canada). That means homeowners hoping to "wait it out" for a return to 2021-era pricing should plan around today's reality rather than a rate environment that may not return for years.
Frequently Asked Questions
How much more will my payment go up at renewal?
It depends heavily on your original rate, remaining balance, and whether you're fixed or variable , but recent Ratehub.ca data shows renewal increases in the 20-25% range are common for those who locked in five-year fixed rates in 2021.
Can I switch lenders at renewal without re-qualifying under the stress test?
Recent OSFI rule changes have made it easier to switch lenders at renewal for uninsured mortgages without a full stress-test re-qualification , ask your mortgage broker whether this applies to your situation.
Should I sell instead of renewing at a higher rate?
That depends on your equity, your household budget, and the local market in your city. A conversation with both a mortgage broker and a real estate agent before your renewal date will give you the clearest picture.
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*Facing a mortgage renewal and wondering what your home is really worth today? Get a free, no-obligation home valuation from Hamodi Realty before you make any decisions.*