What GTA homeowners need to know about the mortgage renewal wave hitting in this year (2026).
Table of Contents
The Numbers: Expected Payment Changes
Real GTA Examples: Payment Shock Scenarios
7 Strategies to Reduce Your Payment Shock
When to Act: Your Renewal Timeline
The Bottom Line
Key Takeaways
Massive Wave: 60% of all Canadian mortgages are renewing in 2025 or 2026.
Fixed Rate Shock: Those who locked in 5-year fixed rates in 2020-2021 face the steepest increases (15-20%).
Variable Relief: Variable rate holders are seeing decreases of 5-7% compared to 2023 peaks.
Proactive Planning: Starting the process 120 days early and shopping around can save thousands.
The Numbers: How Much Will Your Payment Actually Increase?
The Bank of Canada’s latest analysis paints a clear picture:
| Mortgage Type | % of Mortgages | Expected Payment Change |
| 5-Year Fixed (locked in 2020-2021) | 40% | +15% to +20% |
| Variable Rate (variable payment) | ~15% | -5% to -7% |
| Variable Rate (fixed payment) | ~10% | Varies widely (-7% to +40%) |
| Short-Term Fixed (1-3 year) | ~10% | Minimal change or slight decrease |
Key Insight: If you locked in a 5-year fixed rate in 2020-2021, you’re facing the biggest payment shock. Variable rate holders are actually seeing relief as rates have come down from their 2023 peak.
Real GTA Examples: What Payment Shock Looks Like
Example 1: Mississauga Homeowner (5-Year Fixed)
Original Mortgage (2021): $600,000 at 1.8%, 25-year amortization
Original Payment: $2,606/month
Renewal Rate (2026): 4.5%
New Payment: $3,205/month
Increase: $599/month ($7,188/year)
Example 2: Oakville Homeowner (5-Year Fixed)
Original Mortgage (2021): $800,000 at 2.1%, 25-year amortization
Original Payment: $3,408/month
Renewal Rate (2026): 4.3%
New Payment: $4,198/month
Increase: $790/month ($9,480/year)
Example 3: Richmond Hill Homeowner (Variable Rate – Good News!)
Original Mortgage (2022): $700,000 variable, peaked at 6.5% in 2023
Payment at Peak (2023): $4,628/month
Current Rate (2026): 3.45% (prime minus 0.8%)
Current Payment: $3,526/month
Decrease: $1,102/month ($13,224/year savings!)
7 Strategies to Reduce Your Payment Shock
1. Extend Your Amortization Period
If your mortgage is below 80% loan-to-value, you can extend your amortization back to 25 or 30 years. This spreads payments over more time, reducing monthly costs.
Example: A $500,000 mortgage at 4.5% costs $2,836/month over 20 years vs. $2,533/month over 25 years. That’s $303/month savings.
Downside: You’ll pay more interest over the life of the mortgage.
2. Make a Lump Sum Payment Before Renewal
Most mortgages allow 10-20% lump sum payments annually. Putting $20,000-$40,000 down before renewal reduces your principal and therefore your payment.
Example: Paying down $30,000 on a $600,000 mortgage saves roughly $150/month in payments.
3. Shop Around (Don’t Auto-Renew With Your Current Bank)
This is critical. Your current lender often quotes you a higher rate than what they offer new customers. According to Equifax, 28% of homeowners are now switching lenders at renewal—up 46% from last year.
Action: Contact a mortgage broker 120 days before renewal. They can access rates from 30+ lenders and negotiate on your behalf.
Potential Savings: 0.2-0.5% lower rate can save $100-$250/month on a $600K mortgage.
4. Consider Variable Rate (Carefully)
With the Bank of Canada’s rate at 2.25% and likely staying there through 2026, variable rates (currently 3.45-3.7%) are attractive. They’re lower than 5-year fixed rates (4.3-4.7%).
Upside: Lower payment now. If rates drop further, you benefit immediately.
Risk: If inflation resurges or tariff war worsens, rates could rise. Be sure you can afford potential increases.
5. Blend and Extend
Some lenders offer to “blend” your old low rate with today’s higher rate and extend your term. Not always a great deal, but worth asking about.
6. Consolidate High-Interest Debt
If you’re carrying credit card debt (19-21% interest) or car loans (6-8%), consolidating this into your mortgage at renewal can free up monthly cash flow.
Example: Paying off $30,000 in credit card debt at 20% saves you $500/month in minimum payments, even though your mortgage payment increases slightly.
7. Talk to Your Lender About Hardship Options
If you genuinely can’t afford the new payment, contact your lender immediately. Options include:
Temporary payment deferrals
Interest-only payments for 6-12 months
Modified payment plans
When to Act: Your Renewal Timeline
120 Days Before Renewal
Contact a mortgage broker to explore options
Request rate quotes from 3-5 lenders
Calculate payment scenarios (fixed vs. variable, different amortizations)
90 Days Before Renewal
Decide on strategy (fixed/variable, term length, lump sum payments)
If switching lenders, start application process
Review your budget to ensure affordability
30-60 Days Before Renewal
Finalize your lender choice
Sign renewal documents
Confirm new payment amount and start date
The Bottom Line
The mortgage renewal wave is real, and if you locked in a 5-year fixed rate in 2020-2021, you’re facing a significant payment increase. But you have options:
Don’t panic. 60% of homeowners are in the same boat. Most will manage the increase.
Don’t auto-renew. Shop around. You can save thousands by switching lenders.
Start early. Contact a broker 120 days before your renewal date.
Use all tools available. Extend amortization, make lump sums, consolidate debt—every little bit helps.
Variable might make sense. With rates unlikely to rise much in 2026, variable rates offer savings—if you can tolerate some uncertainty.
The good news? This is a one-time shock. Once you renew at today’s rates, you’ll lock in for another term. And if rates fall over the next 5 years, your next renewal will be pleasant. The hard part is getting through 2025-2026.
Need help navigating your renewal? We work with experienced mortgage brokers who specialize in GTA properties and can find you the best rates available. Contact us today.
About the Author: Aman Harish
Aman Harish is a Co-Owner and Mortgage Broker at Canadian Mortgage Services. With over 14 years of experience navigating the complexities of the Canadian lending landscape, Aman specializes in helping homeowners and buyers develop proactive renewal strategies and optimize their debt structure in challenging economic climates. His commitment is to ensuring clients not only secure the best rates but also build long-term financial resilience.