60% of Canadian Mortgage Renewals to Face Payment Increases

The Bank of Canada has sounded a cautionary note for homeowners approaching their renewal windows in the next 12–18 months: nearly 60% of Canadian mortgage renewals will face payment increases, and some could be steep.

The 2025–2026 Wave

According to BoC’s latest financial stability report, a large portion of Canadian mortgages originated in 2020–2021 during record-low interest rates. These homeowners are now nearing renewal at today’s higher rates, and that means payment shock is coming.

Fixed-rate borrowers who locked in around 1.5%–2.5% may now see offers closer to 4.5%–5.5%, depending on term and lender.

The average expected monthly payment hike? Somewhere between 15% to 20%, according to BoC modeling.

“These renewal hikes may come as a shock to homeowners.” “Read our breakdown of why this could get worse in 2025.” Read our breakdown

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Who’s Most Affected?

• Fixed-rate borrowers with 5-year terms expiring in 2025 are the largest group at risk.
• Those with high loan-to-value ratios or tight budgets may fail the updated stress test unless incomes have also risen.
• First-time homebuyers from the pandemic era are especially vulnerable, having purchased at peak prices with minimal down payments.

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Variable-Rate Borrowers: A Different Story?

Interestingly, the BoC suggests that some variable-rate borrowers may see relief as the central bank’s rate-cutting cycle begins in late 2025 or early 2026.

With prime rates expected to inch down, monthly payments may stabilize or even drop slightly for some adjustable-rate mortgage holders.

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What Can Borrowers Do?

Mortgage experts are advising early action:

• Renew up to 120 days early with a rate hold
• Consider extending amortization to soften the blow
• Refinance or blend-and-extend to improve cash flow
• Speak with a mortgage broker or advisor to compare offers

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What This Means for You

If your mortgage renewal is due between mid-2025 and end of 2026, now is the time to review your options, budget, and rate forecasts.

With so many households bracing for higher payments at renewal, it’s important to understand why rates are where they are today — and where they might go next. Explore the latest mortgage interest rate changes in Canada to see how they’re affecting borrowers coast to coast.

Waiting until your lender mails a renewal offer may cost you thousands. A proactive approach could be the difference between staying afloat — or scrambling.