Published: February 13th, 2026 • Last Updated: February 13th, 2026
Author: Ross Taylor on AskRoss.ca

How to Prepare for Your Mortgage Renewal and Rising Rates in Canada

If your mortgage is coming up for renewal in 2026, I don’t need to tell you this isn’t 2021 anymore.

The ultra-low rates are long gone, and most Canadians are staring down renewal offers that are hundreds, even thousands, of dollars more per month than what they’re used to.

It’s what we in the business are calling payment shock, and for some, it’s going to be a sharp hit to their finances.

The good news? You’re not powerless, and you’re not alone. We’re here to help.

If you’re considering a refinance or you’re looking to make a change, there are steps you can take now to soften the blow, improve your options, and avoid making costly mistakes.

Make sure to read our article: “10 Smart Things You Can Do Before Your Mortgage Renews In 2026” to protect your finances and avoid getting caught off guard.

Jump to a specific section in this article ↓↓

• Why are mortgage payments rising so much in 2026?
• What are my options if I can’t afford my new mortgage payment?
• Should I switch to a variable mortgage in 2026?
• What if I can’t pass the stress test at renewal?
• Will rates go back down after 2026?
• Bottom Line: How to prepare for your 2026 mortgage renewal
• List of all FAQs: What Will Happen to My Mortgage Payments When My Low Rate Expires?

Why are mortgage payments rising so much in 2026?

We’re heading into a major renewal cycle across Canada.

Between 2025 and 2026, more than 1.8 million mortgages will come up for renewal. Many of these were taken during the pandemic when interest rates were at historic lows.

Fast forward to today, and fixed mortgage rates have more than doubled, currently hovering around 4.5%, with variable rates between 4% and 4.95%.

What kind of increases are we talking about?

• Renewals in 2026 could see payments jump 6% to 20%, depending on the type of mortgage you have and when it was originated.
• Five-year fixed-rate holders from 2021 may see the steepest increase, as their rates go from under 2% to something in the low-4% range.
• On an average mortgage, this could mean a jump to $2,880 per month, with nearly $1,930 of that just in interest.

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What are my options if I can’t afford my new mortgage payment?

This is the number one question I’m hearing from clients right now. The good news? You do have options, but you need to start planning early.

These aren’t one-size-fits-all solutions, but combined smartly, they can reduce the risk and help smooth your financial transition into a higher-rate world.

I’ve broken down all the strategies you can take in this helpful checklist, “10 Smart Things You Can Do Before Your Mortgage Renews In 2026”.

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Should I switch to a variable mortgage in 2026?

This is one of the most common questions I get, and one of the most nuanced.

Variable-rate mortgages have historically offered lower average rates than fixed mortgages. In 2026, that may still be true.

With the Bank of Canada’s policy rate projected to hold steady around 2.25% to 2.75%, variable-rate products, especially those offering deep discounts off prime, could be more affordable in the short term.

But let’s not forget: variables come with uncertainty. If inflation heats up again, or geopolitical tensions push bond yields higher, we could see rates climb when you least expect it.

On the flip side, if the BoC makes surprise cuts, variable-rate borrowers could benefit quickly.

Here’s what to weigh:

• Variable mortgages offer short-term savings, especially if you can secure one that’s 0.5% to 1.5% below a comparable fixed rate. That adds up. But they require a certain comfort level with risk, your payment could change with little notice.
• Fixed-rate mortgages offer predictability, which is especially valuable if you’re already close to your affordability limit or have very little wiggle room in your monthly budget.
• A 3-year fixed may be the best of both worlds, allowing you to sidestep locking in for five years at peak-cycle rates, while keeping a bit more payment stability than variable.

If you’re on the fence, let’s talk. We’ll model out your payment scenarios under fixed and variable options and figure out which aligns better with your financial reality and mindset.

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What if I can’t pass the stress test at renewal?

This is a real concern for a growing number of Canadians, and with good reason.

If you originally qualified for your mortgage in 2020 or 2021, your financial profile may look different now, even if you’ve done nothing “wrong.”

Here’s how the rules work:

• If you renew with your current lender and you’re not borrowing more, you typically won’t need to requalify under the stress test. You can take their renewal offer as-is, though that offer might not be the best one on the market.
• If you want to refinance or switch to another lender, this is often a solution we suggest if your financial situation has changed since you got your mortgage. If your monthly budget feels tight, refinancing to extend your mortgage could be a smart move to provide you the breathing room you need.

If you’re close to the threshold, even a few hundred dollars in monthly car payments or high credit card balances can tip the scales.

Pro tip:

• Pay down other debt in the months leading up to your renewal. Focus on high monthly obligations like car loans or revolving credit.
• Clean up your credit and avoid new credit inquiries.
• Add a co-borrower with a strong income and credit if your file is tight; it can make a significant difference in your qualification.

The earlier we start planning, the more flexibility we’ll have. Don’t wait until you’re in front of the bank’s renewal desk to find out you’re boxed in.

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Will rates go back down after 2026?

It’s tempting to hope that rates will fall back to the levels we saw during the pandemic, but that’s not where things are headed.

Most major banks, including RBC, TD, and CIBC, are forecasting that the Bank of Canada’s policy rate will stabilize between 2.25% and 2.75% for most or all of 2026.

That may feel “low” compared to the last two years, but it’s a far cry from the emergency-level 0.25% we saw during COVID.

What this means for you:

• Five-year fixed rates are likely to stay above 4%, with very little chance of returning to the 2%–3% range.
• Variable rates may fluctuate, but expectations are that they’ll hold between 3.5% and 4.5% for the foreseeable future.
• Waiting for rates to drop before renewing or refinancing could be a costly gamble, especially if inflation or global trade issues keep rates elevated longer than expected.

The smartest approach? Build your mortgage strategy around today’s realities, not yesterday’s rates.

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Bottom Line: How to prepare for your 2026 mortgage renewal

Mortgage renewals in 2026 are shaping up to be a major financial event for many Canadian homeowners. Rates are still high, inflation hasn’t totally cooled, and household budgets are stretched thin.

But you’ve got tools and time on your side.

Start planning now. Whether it’s securing a rate hold, consolidating debt, or reassessing your amortization, the earlier we put a plan in place, the more confident and comfortable you’ll feel when that renewal letter shows up in your mailbox.

And remember, this doesn’t have to be a solo mission.Our team will help you review your situation from every angle, not just what the lender shows you, and make sure your next mortgage term is built around your real-world goals and budget.

If you’re coming up for renewal in 2026 andwant to start planning early, don’t wait. Let’s talk.

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List of all FAQs: What Will Happen to My Mortgage Payments When My Low Rate Expires?

Why are mortgage payments rising so much in 2026?

• Over 1.8 million mortgages are renewing into rates that have more than doubled since the pandemic, causing payment increases of 6% to 20%.

What kind of increases are we talking about?

• Five-year fixed-rate holders from 2021 may see the steepest jumps, possibly to $2,880 per month, with a major portion going to interest.

What are my options if I can’t afford my new mortgage payment?

• You have options like adjusting amortization, consolidating debt, or switching products, but planning ahead is critical.

Should I switch to a variable mortgage in 2026?

• Variable mortgages may offer short-term savings, but come with risk. A 3-year fixed may offer a balance between savings and stability.

What if I can’t pass the stress test at renewal?

• You can renew with your existing lender without requalifying, but to switch lenders or refinance, you’ll need to pass the stress test again.

What are some tips to pass the stress test?

• Pay down debts, clean up your credit, avoid new inquiries, and consider adding a co-borrower to strengthen your application.

Will rates go back down after 2026?

• Rates are expected to stabilize, not drop drastically. Five-year fixed rates may stay above 4%, with variable rates fluctuating between 3.5%–4.5%.

Is it better to wait until rates fall before refinancing?

• Waiting can be risky and costly. It’s better to plan using current conditions rather than gambling on future rate drops.

How can I prepare for my 2026 mortgage renewal?

• Begin early. Assess options, reduce debt, consider refinancing strategies, and speak with a mortgage professional to build your plan.

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