If your mortgage was locked in during 2020 or 2021, the rate on your renewal letter is probably more than double what you've been paying. The Bank of Canada estimated that about 60% of all Canadian mortgages renew in 2025 or 2026, and that people coming off five-year fixed terms face payment increases of around 15% to 20% on average. BC balances are larger than most, so the dollar jump is larger too. The renewal letter is a starting offer, not a bill. This page shows what the new payment will be, what shopping around is worth, and what to do if the number doesn't fit.
Why 2026 renewals hurt
Rates were at record lows when many of today's renewing mortgages started. A $600,000 mortgage taken in late 2021 at 1.99% over 25 years has a payment of about $2,538. After five years, about $502,500 is still owing, with 20 years left.
Renewing that balance over the same 20 years:
- at 4.64%, a typical first renewal offer, the payment is about $3,205 a month, $667 more
- at 4.29%, around the best insured five-year rates in late September 2026, it's about $3,112, $574 more
Over a five-year term, the gap between those two rates costs about $8,200 in interest, for the same mortgage.
Not everyone faces an increase. Many variable-rate borrowers renewing in 2026 see payments fall, and TD Economics estimated the median change across all 2026 renewals at close to zero. But for five-year fixed borrowers, the jump is real and it arrives all at once.
How renewal offers work
Your lender sends a renewal statement before your term ends. Federally regulated lenders must send it at least 21 days ahead, and most send it months earlier. It lists the rates they're offering for each term.
The first offer is often above what the same lender gives new customers, because many borrowers sign it without checking. Call and ask for a better rate, ideally with a written quote from another lender or a broker in hand. Retention departments have room to move.
You can usually renew early, up to 120 days before the term ends, without a penalty. Most lenders and brokers will also hold a quoted rate for up to 120 days. So start shopping about four months ahead. If rates fall before you sign, you can usually still take the lower one.
Switching lenders at renewal
At maturity, you can move your mortgage to any lender without a prepayment penalty. What used to stop people was the stress test. That's no longer an obstacle for a straight switch:
- Insured mortgages (originally less than 20% down) have never needed to requalify when switched at renewal without changes.
- Uninsured mortgages have been exempt since November 21, 2024, when OSFI removed the stress test for straight switches, meaning the same balance and the same remaining amortization.
Add money, extend the amortization or change the borrowers, and it becomes a refinance, which means qualifying again at the stress test rate.
What switching costs. Your current lender charges a discharge fee, typically a few hundred dollars. Many new lenders pay the legal and appraisal costs of a switch to win the business, so ask. Enter the total in the calculator to see whether the rate difference covers it.
If the new payment doesn't fit
- Pay down a lump sum at renewal. Maturity is the one moment you can prepay any amount without a penalty. Money from a TFSA, savings or a gift reduces the balance the new rate applies to. Try it in the calculator.
- Choose a different term. In late 2026, shorter fixed terms and variable rates are priced differently from five-year fixed. A shorter term can make sense if you expect to sell or refinance, or expect rates to fall. It also means another renewal sooner.
- Extend the amortization. Stretching back to 25 or 30 years cuts the payment but adds interest. With an uninsured mortgage it's usually a refinance, with a stress test. With an insured mortgage, extensions are generally only possible through lender relief for borrowers in difficulty. Federal guidance asks lenders to offer such relief, so ask early, before you miss a payment.
- Keep your payment and let the amortization run longer. Some lenders will set the payment and extend the time to pay off. The calculator shows how long that would take at your new rate.
- Consolidate other debt. Rolling credit card or car debt into the mortgage through a refinance can lower total monthly payments, at the cost of paying them off over decades. It requires qualifying again.
Fixed, variable, or shorter?
There's no right answer without a forecast, and forecasts disagree. In late September 2026, the Bank of Canada had held its rate at 2.25% for seven meetings, prime was 4.45%, and markets were pricing the next move as a rise rather than a cut.
Two practical points matter more than predictions:
- Breaking a variable mortgage usually costs three months' interest, while breaking a fixed one at a big bank can cost far more. If you might sell within five years, that matters.
- Check the whole renewal ladder, not just the five-year rate. The BC mortgage rates page shows current rates by term.
Renewing a rental property
Rental mortgages renew the same way, but the payment increase lands on your cash flow. Many Lower Mainland condos already run negative at today's rates. Model it with the investor guide's screener before you decide whether to keep, sell or refinance.
Interest on a rental mortgage is deductible, which softens the after-tax cost. But principal isn't, and a longer amortization only delays the problem.
A renewal checklist
- About 4 months before your term ends, find your balance, remaining amortization and maturity date on your latest statement.
- Get at least one written quote from another lender or a broker, and ask it to be held.
- Call your lender and ask for their best rate, quoting the competing offer.
- Decide whether to pay down a lump sum at renewal, and move the money in time.
- Compare the full cost over the term, including any switching costs, not just the rate.
- Read the new commitment: prepayment privileges, portability and penalty method matter as much as the rate.
- Sign before the maturity date. If you don't, many lenders roll you into an open or short term at a higher rate.
Mistakes we see
Signing the first renewal offer. It's rarely the best one available, even from the same lender.
Assuming you can't switch because of the stress test. A straight switch doesn't need it.
Starting too late. With less than a month to go, you lose the leverage of shopping.
Missing the lump-sum window. Renewal is the only time you can prepay any amount without penalty.
Letting the mortgage mature without signing, and ending up in a costly short or open term.
Waiting to call your lender until payments are already missed. Relief options are easier to arrange before that.
Questions people ask us
How much will my mortgage payment go up at renewal?
It depends on your balance, remaining amortization and the gap between your old and new rates. A $502,500 balance with 20 years left, moving from 1.99% to 4.29%, goes from about $2,538 to $3,112 a month. The Bank of Canada estimated average increases of around 15% to 20% for five-year fixed borrowers renewing in 2025 and 2026.
Do I have to pass the stress test to switch lenders at renewal?
Not for a straight switch, meaning the same balance and remaining amortization. Insured mortgages never required it, and OSFI removed it for uninsured mortgages on November 21, 2024. Adding money or extending the amortization makes it a refinance, which does require qualifying.
How early can I renew my mortgage?
Most lenders let you renew up to 120 days before the term ends without a penalty, and many will hold a quoted rate for up to 120 days. Federally regulated lenders must send a renewal statement at least 21 days before maturity.
Can I pay down my mortgage when it renews?
Yes. At maturity you can pay down any amount without a prepayment penalty, which reduces the balance the new rate applies to.
Should I take the rate in my renewal letter?
Not without checking. First renewal offers are often higher than the lender's best rate. Get a written quote from another lender or a broker, and ask your lender to beat it.
What does it cost to switch lenders at renewal?
Usually a discharge fee from your current lender, typically a few hundred dollars. Many new lenders cover legal and appraisal costs on a switch. The calculator compares those costs with the interest you'd save.
Can I extend my amortization at renewal to lower the payment?
With an uninsured mortgage, usually through a refinance, which means qualifying again. With an insured mortgage, extensions are generally limited to lender relief for borrowers in difficulty. Contact your lender early if the payment won't fit.
778-918-5990
Renewing in the next six months?
Dan can connect you with brokers who quote renewals and switches across lenders, so you have a written offer to compare with your renewal letter. Your calculator numbers come along with the message.
