The Mortgage Renewal Shock Is Here. Here’s What Homeowners Can Do About It
For years, Canadians heard about the mortgage renewal wave that was coming. For many homeowners, it's no longer something on the horizon.
Mortgages taken out during the ultra-low-rate years of 2020 and 2021 are now renewing in a very different market. Borrowers who once had rates below 2% are facing higher borrowing costs, and even when the increase looks manageable on paper, it can make a noticeable difference to the monthly budget.
Recent research from Rates.ca and Leger gives us a sense of that pressure. Among Canadians who renewed their mortgages since January 2025, 82% ended up with a different rate, with most increases reportedly between two and 4.99 percentage points. At the same time, 45% said their mortgage now accounts for more than half of their monthly household budget.
Younger homeowners are feeling it even more. Among those aged 18 to 34 who renewed, 90% said they were paying a higher rate, and 56% reported putting between half and roughly 70% of their monthly household budget toward their mortgage.
Those numbers make renewal about much more than finding a new rate.
Start Before the Renewal Letter Arrives
One of the easiest things you can do is run the numbers early.
If your mortgage is renewing six months from now, you don't know exactly where rates will be by then. But you can see what your payment would look like at today's rates and work from there.
If that calculation shows your payment could increase by $500 or $700 a month, you now have something useful to plan around. Maybe the increase fits comfortably. Maybe it means cutting back somewhere else. Or maybe it's a sign that you should look at the mortgage and the rest of your debts more closely before renewal.
Either way, finding out early is much better than discovering it when the renewal offer lands in your inbox.
Don't Make It All About the Rate
It's natural to focus on getting the lowest rate possible, especially when you're carrying a large mortgage. But the cheapest rate isn't always attached to the mortgage that will serve you best.
Prepayment privileges, penalties, portability and refinancing options can matter just as much if your plans change. A mortgage that saves a little interest today can become expensive if you need to break it two years from now.
Renewal is also a good time to look at amortization. Extending it can lower the required payment and create some breathing room, although you'll generally pay more interest over time. For some households, that trade-off may be worthwhile. For others, keeping the shorter amortization and accepting the higher payment may make more sense.
The point isn't that one option is better. It's that the mortgage should work with your finances, not against them.
Look at the Rest of Your Debt Too
A mortgage doesn't exist on its own. There may also be a car loan, line of credit, credit card balance or other debt taking a bite out of the same monthly income.
Renewal gives you a natural opportunity to look at all of it together.
In some situations, restructuring higher-interest debt can improve monthly cash flow and reduce interest costs. But simply moving debt onto a mortgage isn't automatically a win. Turning debt that could have been paid off in a few years into debt carried for 20 years can cost more in the long run.
If debt is being consolidated, there should be a plan for paying it down, not just a lower monthly payment.
Leave Yourself Some Breathing Room
The most concerning part of the recent renewal numbers may be how much of some household budgets are already going toward the mortgage.
When half or more of your monthly cash flow is committed to housing, an unexpected repair, a large bill or a temporary drop in income becomes much harder to absorb.
That's worth remembering when deciding how aggressively to pay down a mortgage. Putting every available dollar against the balance can feel productive, but keeping some money accessible for emergencies has value too.
Make Renewal a Planning Opportunity
BMO estimated that roughly 1.8 million Canadian mortgages would renew between September 2025 and September 2026, with the wave peaking around June 2026. Many of those borrowers are coming off some of the lowest mortgage rates Canada has seen.
That doesn't mean every homeowner is headed for financial trouble. But it does mean a lot of people are adjusting to payments that look very different from what they became accustomed to.
If your mortgage is renewing in the next 6 to 12 months, don't wait for your lender to tell you what happens next. Run the numbers now, look at your options and figure out what payment actually works for your household.
Your renewal date isn't a surprise. Your new payment shouldn't be either.
Sources
Rates.ca / Leger:Nearly Half of Canadians Renewing Mortgages Spend Over 50% of Monthly Budget on Housing
BMO Economics:The Mortgage Renewal Wave: Sink or Swim?
Disclaimer: The information in this article is provided for general educational purposes only and does not constitute financial, legal, or tax advice. Readers should consult qualified professionals before making decisions based on this content. View our full Disclaimers & Privacy Policy →
For years, Canadians heard about the mortgage renewal wave that was coming. For many homeowners, it's no longer something on the horizon.
Mortgages taken out during the ultra-low-rate years of 2020 and 2021 are now renewing in a very different market. Borrowers who once had rates below 2% are facing higher borrowing costs, and even when the increase looks manageable on paper, it can make a noticeable difference to the monthly budget.
Recent research from Rates.ca and Leger gives us a sense of that pressure. Among Canadians who renewed their mortgages since January 2025, 82% ended up with a different rate, with most increases reportedly between two and 4.99 percentage points. At the same time, 45% said their mortgage now accounts for more than half of their monthly household budget.
Younger homeowners are feeling it even more. Among those aged 18 to 34 who renewed, 90% said they were paying a higher rate, and 56% reported putting between half and roughly 70% of their monthly household budget toward their mortgage.
Those numbers make renewal about much more than finding a new rate.
Start Before the Renewal Letter Arrives
One of the easiest things you can do is run the numbers early.
If your mortgage is renewing six months from now, you don't know exactly where rates will be by then. But you can see what your payment would look like at today's rates and work from there.
If that calculation shows your payment could increase by $500 or $700 a month, you now have something useful to plan around. Maybe the increase fits comfortably. Maybe it means cutting back somewhere else. Or maybe it's a sign that you should look at the mortgage and the rest of your debts more closely before renewal.
Either way, finding out early is much better than discovering it when the renewal offer lands in your inbox.
Don't Make It All About the Rate
It's natural to focus on getting the lowest rate possible, especially when you're carrying a large mortgage. But the cheapest rate isn't always attached to the mortgage that will serve you best.
Prepayment privileges, penalties, portability and refinancing options can matter just as much if your plans change. A mortgage that saves a little interest today can become expensive if you need to break it two years from now.
Renewal is also a good time to look at amortization. Extending it can lower the required payment and create some breathing room, although you'll generally pay more interest over time. For some households, that trade-off may be worthwhile. For others, keeping the shorter amortization and accepting the higher payment may make more sense.
The point isn't that one option is better. It's that the mortgage should work with your finances, not against them.
Look at the Rest of Your Debt Too
A mortgage doesn't exist on its own. There may also be a car loan, line of credit, credit card balance or other debt taking a bite out of the same monthly income.
Renewal gives you a natural opportunity to look at all of it together.
In some situations, restructuring higher-interest debt can improve monthly cash flow and reduce interest costs. But simply moving debt onto a mortgage isn't automatically a win. Turning debt that could have been paid off in a few years into debt carried for 20 years can cost more in the long run.
If debt is being consolidated, there should be a plan for paying it down, not just a lower monthly payment.
Leave Yourself Some Breathing Room
The most concerning part of the recent renewal numbers may be how much of some household budgets are already going toward the mortgage.
When half or more of your monthly cash flow is committed to housing, an unexpected repair, a large bill or a temporary drop in income becomes much harder to absorb.
That's worth remembering when deciding how aggressively to pay down a mortgage. Putting every available dollar against the balance can feel productive, but keeping some money accessible for emergencies has value too.
Make Renewal a Planning Opportunity
BMO estimated that roughly 1.8 million Canadian mortgages would renew between September 2025 and September 2026, with the wave peaking around June 2026. Many of those borrowers are coming off some of the lowest mortgage rates Canada has seen.
That doesn't mean every homeowner is headed for financial trouble. But it does mean a lot of people are adjusting to payments that look very different from what they became accustomed to.
If your mortgage is renewing in the next 6 to 12 months, don't wait for your lender to tell you what happens next. Run the numbers now, look at your options and figure out what payment actually works for your household.
Your renewal date isn't a surprise. Your new payment shouldn't be either.
Sources
Rates.ca / Leger: Nearly Half of Canadians Renewing Mortgages Spend Over 50% of Monthly Budget on Housing
BMO Economics: The Mortgage Renewal Wave: Sink or Swim?
Disclaimer: The information in this article is provided for general educational purposes only and does not constitute financial, legal, or tax advice. Readers should consult qualified professionals before making decisions based on this content. View our full Disclaimers & Privacy Policy →
Read Next
Why I'm Giving My Kids Their Inheritance at 25, Not 75
The Mortgage Interest You Can't Deduct and the Loan Structure That Changes That
Can a Management Company Help Reduce Tax on Your Rental Properties?
The Six-Figure Gap Between What You Earn and What You Keep