Renewing your mortgage in 2026? Here's what the payment math actually says
About 60% of Canadian mortgages renew in 2025–2026, and the Bank of Canada held its rate again in July. What a five-year fixed renewal really costs — and the levers that soften it.
If your mortgage comes up for renewal this year, you're in the biggest renewal cohort Canada has ever seen: about 60% of all outstanding mortgages renew in 2025 or 2026. On July 15, the Bank of Canada held its policy rate at 2.25% for a sixth straight decision — so the rate you renew into is, for now, a known quantity. The next announcement is September 2, 2026.
The question is what that does to your monthly payment. The Bank's own analysis has an answer, and it's more polarized than the headlines suggest.
Who actually pays more
The Bank of Canada projects that about 60% of borrowers renewing in 2025–2026 will see payments rise — roughly one-third of all mortgage holders in the country. But the size of the change depends almost entirely on what you're renewing out of:
- Five-year fixed: the pandemic-rate cohort. If you locked in around 1.5–2% in 2021, you're renewing into a much higher rate. The Bank pegs the average increase for five-year fixed renewals in 2026 at about 20% versus your December 2024 payment.
- Variable rate, fixed payment: the widest range. About 10% of these borrowers face increases of more than 40%, while a quarter will actually see payments fall by 7% or more — it depends on how much principal you prepaid while rates were high.
- Variable rate, variable payment: you already absorbed the pain in 2022–2023. Payments here have peaked and should decline on average 5–7%.
The median payment change across all 2026 renewals is close to zero. That's not because renewals are painless — it's because the pain is concentrated in one group (five-year fixed) while another group gets relief.
What a 20% jump means in dollars
On a $500,000 balance, moving from a pandemic-era fixed rate to today's rates adds roughly $300–$350 a month. Whether that's an annoyance or a crisis depends on the share of your take-home pay the new payment eats. A payment that climbs from 15% of gross income to 18% — the Bank's median for affected borrowers — is manageable for most; the same jump on an already-stretched budget is not. Run your new payment through the house poor calculator to see where you'd land.
Four levers before you sign the renewal letter
- Shop the rate. Your lender's renewal letter is an opening offer, not a final one. You can switch lenders at renewal without re-qualifying under the stress test in most straight-switch cases.
- Extend the amortization. The Bank estimates about half of borrowers facing higher payments could erase the increase entirely by adding five years — at the cost of more lifetime interest.
- Prepay before renewal. A lump sum against principal in the weeks before renewal shrinks the balance the new rate applies to.
- Rethink the term. Locking in five years at today's rates is a bet rates won't fall further; shorter terms keep options open for what the Bank does after September.
The takeaway
If you're renewing a five-year fixed in 2026, budget for roughly a fifth more per month and negotiate hard — the increase is real but rarely ruinous, and income growth since 2021 has absorbed part of it. Before you sign, check what the new payment does to your take-home pay and whether the home still fits your income with the home affordability calculator.
Renewal figures: Bank of Canada, Staff Analytical Note 2025-21 and the July 15, 2026 policy rate announcement.