Mortgage renewals squeeze many Canadian households despite lower rates

By Tahani Elghazaly
Published March 25, 2026

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Mortgage renewals are back in focus across Canada as a large share of homeowners move into renewal over 2025 and 2026, turning what used to feel like a routine banking step into a serious financial test for many households. Bank of Canada analysis says about 60 percent of outstanding mortgages will renew in 2025 or 2026, and roughly 60 percent of that group is expected to face higher payments at renewal.

The pressure is closely tied to mortgages that were taken out or renewed during the pandemic, when borrowing costs were exceptionally low. According to the Bank of Canada, the average monthly mortgage payment could be about 10 percent higher for borrowers renewing in 2025 than their December 2024 payment level, and about 6 percent higher for those renewing in 2026. For many five-year fixed-rate borrowers, who make up most of the group expected to see payment increases, the jump can be more noticeable.

The strain is not expected to hit every region in the same way. CMHC says mortgage arrears are projected to keep rising moderately across Canada from late 2025 to late 2026, with Toronto and Vancouver seen as the most exposed major markets. At the same time, CMHC notes that arrears remain low by historical standards nationally, even as financial stress becomes more visible among some highly indebted households and some buyers who entered the market during the low-rate years.

There are, however, some policy and consumer protections that may ease part of the pressure. Under the Canada Mortgage Charter, federally regulated lenders are expected to contact borrowers about renewal options four to six months before renewal, and insured mortgage holders can switch lenders at renewal without requalifying under the insured minimum qualifying rate. These measures are meant to give households more room to compare options and avoid unnecessary barriers when trying to manage higher costs.

Even with interest rates now well below their recent peak, the issue has not disappeared. The Bank of Canada held its policy rate at 2.25 percent on March 18, 2026, but many borrowers are still rolling off mortgage terms that were set when rates were far lower than they are today. That is why mortgage renewal is emerging as one of the biggest household money stories in Canada this year: not because rates are rising again, but because the delayed impact of earlier hikes is still landing in family budgets.