Mortgage renewal in Canada, 2026: the 120-day plan
Canada is in the middle of the biggest renewal wave in its history. The Bank of Canada estimated that roughly 60 percent of all outstanding mortgages come up for renewal in 2025 and 2026, and that five-year fixed borrowers renewing in 2026 face an average payment increase of about 20 percent. The renewal letter your lender mails is written to be signed, not negotiated. This guide is the plan that beats it, with the calculator, the countdown and the exact rules.
What the renewal letter really costs: the calculator
Type your numbers. Everything runs in your browser; nothing is sent anywhere.
Mortgage renewal calculator
Compares your current payment with the payment at a new rate, and shows what signing a higher rate costs over a five-year term.
over a five-year term$0
Canadian fixed mortgages compound semi-annually; the calculator uses that convention and a monthly payment. Estimates only, not advice. Payment shock of 20 percent is the Bank of Canada's 2026 average for five-year fixed renewers, your case may differ.
Your 120-day countdown
Enter your maturity date. The clock turns red at 21 days, the point where federally regulated lenders must have sent your renewal statement and where most of your leverage is gone.
Renewal countdown
rate hold opens
get quotes
retention call
statement due
Free. Nothing moves without you.
The plan, day by day
Day 180 to 120: find your five numbers
Open your latest mortgage statement and write down the maturity date, the balance, the rate, the remaining amortization and the penalty formula. Most people cannot answer two of those from memory, and the renewal conversation is lost on the numbers, not the rate. Pull your credit report too; a mistake found now is fixed before a lender sees it.
Day 120: two written quotes and a rate hold
Most lenders let you lock a renewal rate 120 to 180 days before maturity. Ask one mortgage broker and one online lender for a written quote with the rate, the term, prepayment privileges and who pays switching costs. Then ask for a rate hold in writing. If rates fall before maturity you can usually take the lower one; if they rise you are protected.
Day 90: the retention call
Call your current lender and ask for the mortgage retention department, not the branch. Say that you have a competing offer, state the rate, and ask for their best rate for your file in writing. Banks keep a posted renewal rate for people who sign the letter and a better rate for people who are clearly shopping. You want the second one.
Day 21: read the statement against your quotes
By now the renewal statement has arrived. Put it beside your two quotes and compare the five-year cost, not the headline. A quarter point on a $450,000 balance is several thousand dollars over a term.
Day 0: sign the best total cost, never the default
If you do nothing, many lenders renew you automatically, often onto a term and rate you would not have chosen. Choose on purpose.
The stress test rule that now favours you
Until late 2024 the biggest reason people stayed with a bad renewal offer was the mortgage stress test. Moving to a new lender meant re-qualifying at the higher of your contract rate plus two percent or 5.25 percent, and many households could not. On November 21, 2024, OSFI stopped applying the minimum qualifying rate to straight switches at renewal for both insured and uninsured mortgages, provided the loan amount and amortization stay the same. Your current lender knows this. Your competing quote carries more weight than it did two years ago.
Two caveats. Change the amount or the amortization and the test can come back. Move to a lender that is not federally regulated and different rules apply.
The 21-day renewal letter
Under federal rules, a federally regulated lender must give you a renewal statement at least 21 days before the end of your term. It has to show the balance at renewal, the interest rate, the payment and frequency, the term, and any charges. The same 21 days applies if the lender decides not to renew you. Provincially regulated credit unions follow their province's rules, so the timing and format may differ.
Twenty-one days is enough to sign and not enough to shop. That is why the plan starts at 120.
Early renewal, penalties and blend-and-extend
Inside your lender's early renewal window there is normally no penalty to renew. Outside it, you are breaking the contract. For a closed fixed-rate mortgage the penalty is usually the greater of three months' interest and the interest rate differential, which can be large when your old rate was far below today's. A closed variable usually costs three months' interest. Some lenders offer blend-and-extend, which mixes your old and new rate over a longer term without a penalty; run the total cost before accepting it. Our mortgage penalty guide walks through the IRD math.
Renew with your bank or switch
Compare five things, in writing: the rate, the prepayment privileges, the penalty formula, portability, and which switching costs the new lender covers. Discharge fees, legal fees and an appraisal are the usual costs, and many lenders cover the last two to win your file. If your bank matches the competing offer, staying is fine. The competing offer is what produced the match. See variable or fixed in 2026 for the term decision.
Options people compare at renewal
- Shorter term. One to three years if you think rates fall further. Often priced slightly above five-year fixed.
- Longer amortization. Lowers the payment, raises total interest. A tool for a tight year, not a habit.
- Accelerated biweekly at renewal. Half the monthly payment every two weeks is one extra payment a year; on $450,000 that is about 3.3 years and $45,000. The 13th payment, explained.
- Lump sum before renewal. Most contracts allow a prepayment at maturity with no penalty; a smaller balance renews at a smaller payment.
- A broker. Pulls quotes from many lenders in one application. Looni can refer you to a licensed brokerage; if we are paid for that referral we tell you in writing before the hand-off, as Ontario rules require.
These are options, not recommendations. A licensed mortgage professional can tell you which fits your file.
Questions people ask
When should I start?
120 days before maturity. 180 if your lender's rate hold reaches that far.
Do I need the stress test to switch?
Not for a straight switch at renewal since November 21, 2024.
How much will my payment rise?
The Bank of Canada's average for five-year fixed renewers in 2026 is about 20 percent. Your calculator result above is your number.
Can my bank refuse to renew?
Yes, with 21 days' notice from a federally regulated lender. A broker can place the file elsewhere.
Is early renewal free?
Inside the lender's window, usually. Outside it, a penalty applies.
Founding members get the renewal clock on their dashboard, the words to say at 90 days, and a hand-off to a licensed broker when they want one. Read-only. Nothing moves without you.
Sources
Financial Consumer Agency of Canada, Renewing your mortgage (21-day renewal statement). OSFI announcement of September 2024, effective November 21, 2024, on the minimum qualifying rate for straight switches, as reported by Global News and Ratehub. Bank of Canada, How will mortgage payments change at renewal? An updated analysis (2025). FCAC, Breaking your mortgage contract (penalties).
Rates dropped before your renewal date? Compare blend and extend, and if you are moving, read porting a mortgage.
Want to know whether you would pass the qualifying rate if you switch or refinance? Our mortgage stress test guide has a calculator, and the rate hold guide explains how long a quoted rate is locked.
Thinking of changing product type at renewal? Read do mortgage offset accounts exist in Canada first.