Remember those sweet, low fixed mortgage rates from a few years back? The ones you locked in during the pandemic? Well, if your mortgage is up for renewal in 2026, it’s time for a reality check, because things are looking a whole lot different now. The Bank of Canada has been holding steady, and for many homeowners, that means significantly higher monthly payments.

Table of Contents

1. The Latest on Rates and Inflation
2. What This Actually Means for You
3. What You Should Do About Your Mortgage Renewal
4. Your Trusted Partner in Mortgage Renewals

Key Takeaways

• BoC Holding Steady: The Bank of Canada held its policy rate at 2.25% in January 2026, with the next decision on March 18, 2026. Most economists expect it to stay put.
• Inflation Cooling Slowly: CPI eased to 2.3% in January 2026, not enough to trigger rate cuts any time soon.
• Payment Shock is Real: If you locked in at 2% five years ago, expect monthly payment increases of $540 to $705 depending on the term and type you choose.
• Start Early: Contact a broker 4-6 months before renewal. Your current lender’s offer is rarely their best deal.
• Fixed vs Variable: The spread is narrow right now (3.69-4.5% fixed vs 3.35-3.65% variable), making this more about your risk comfort than rate chasing.

The Latest on Rates and Inflation

Here’s the thing: the Bank of Canada isn’t playing games with rate cuts right now. In their January 28, 2026 announcement, they held their policy interest rate steady at 2.25%. And with their next decision coming up on March 18, 2026, most economists are betting on that 2.25% sticking around for a good chunk of the year, with some even whispering about potential modest hikes later on, not cuts. The BoC is keeping a close eye on global economic stability and persistent inflationary pressures.

Inflation, according to Statistics Canada, eased just a touch to 2.3% in January 2026, down from 2.4% in December 2025. So, while it’s not climbing, it’s not exactly plummeting either, which gives the Bank of Canada less reason to cut rates. This stable-but-elevated interest rate environment is the new normal for the foreseeable future, and it’s something every Canadian homeowner needs to understand.

What This Actually Means for You

If you’re one of the roughly 60% of Canadian homeowners with a mortgage set to renew in 2025 or 2026, and especially if you snagged a fixed rate back when they were hovering around 2%, you’re in for a significant mortgage payment increase. We’re talking average jumps of 15-20%. That’s real money out of your pocket every month. This isn’t just about a higher number on your bank statement; it’s about re-evaluating your household budget, perhaps cutting back on discretionary spending, or finding ways to boost your income.

Let’s break this down with an example. Imagine you’ve got a $400,000 mortgage that was sitting pretty at 2% with a 25-year amortization. Your monthly payment was around $1,695. Now, with current 5-year fixed mortgage rates generally around 3.69-4.5%, and 5-year variable rates in the 3.35-3.65% range as of late February 2026, that payment could easily jump by $600-$700 or more, even if you keep the same amortization. That’s not pocket change; that’s a new car payment, or a substantial chunk of your grocery bill.

What You Should Do About Your Mortgage Renewal

1. Start Early and Know Your Numbers: Don’t wait until the last minute. Get in touch with us 4-6 months before your renewal date. We’ll help you figure out exactly what your new payments could look like and assess your current financial situation. Understanding the impact early gives you power. When you know your options and what other lenders are offering, you walk into that renewal conversation with confidence, not just hoping for the best.

2. Fixed vs. Variable, Time for a Hard Look: This is the big question, isn’t it? With the Bank of Canada’s interest rate forecast holding steady, the gap between fixed and variable rates isn’t as wide as it once was. As of late February 2026, your best 5-year fixed rates are around 3.69-4.5%, while 5-year variable rates are in the 3.35-3.65% range. Not a huge spread, which makes your decision less about chasing the lowest rate and more about your comfort level. A fixed rate offers stability and predictability. A variable rate, while potentially offering a lower initial payment, still carries some risk if rates tick up. It’s about your sleep at night.

3. Explore All Your Options (Beyond Your Current Lender): Your current bank will send you a renewal offer, but here’s a secret: it’s rarely their best deal. They’re hoping you’ll just sign on the dotted line out of convenience. As a brokerage with 40+ lender relationships, we can shop around for you, finding better terms, lower rates, and even different mortgage products that better suit your needs. This is where you can truly soften that mortgage payment increase.

4. Consider Amortization and Payment Structure: Amortization, simply put, is the total time it takes to pay off your mortgage. Can you afford to maintain your amortization or even shorten it slightly? Or do you need to extend it to keep your payments manageable? Extending it will lower your monthly payment, but you’ll pay more interest over the long run. Shortening it means higher payments now, but you’re mortgage-free faster and save a bundle on interest. We can also look at increasing payment frequency or making small extra payments to save on interest.

Your Trusted Partner in Mortgage Renewals

This steady-but-elevated rate environment can feel daunting, but it doesn’t have to be. We’ve been helping Canadians in Brampton and across Ontario with their mortgage renewals since 1988. With over $1 billion funded and relationships with more than 40 lenders, we’ve got the experience and the connections to get you the best deal possible.

Got questions? Contact us today or call 905-455-5005. No pressure, no obligation.

Mortgage Renewal Impact: $400,000 Mortgage Renewing from 2% Rate

Based on $400,000 mortgage, 20-year remaining amortization. Rates as of late February 2026. Your actual rate may vary.

About the Author: Aman Harish

Aman Harish is a Co-Owner and Mortgage Broker at Canadian Mortgage Services. With over 14 years of experience in 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.