For many Canadian homeowners, 2026 is an important mortgage-renewal year. Some borrowers who obtained mortgages during the exceptionally low-rate period of 2021 and 2022 are now renewing for the first time—and may face higher monthly payments even though borrowing costs have eased from their recent peaks.

OSFI estimates that 3.1 million Canadian mortgages, representing approximately 52% of outstanding mortgages, will renew by the end of 2027. About 1.3 million are fixed-rate or fixed-payment variable mortgages renewing for the first time since the low-rate period, and these borrowers may experience material payment increases.

The good news is that homeowners may have more choices than simply accepting the first renewal offer received from their existing lender.

Where interest rates stand

On September 2, 2026, the Bank of Canada maintained its overnight policy rate at 2.25%. The next scheduled interest-rate announcement is October 28, 2026.

A Bank of Canada decision influences variable-rate mortgages and home equity lines of credit, but fixed mortgage rates also depend heavily on Government of Canada bond yields, lender funding costs, competition and the borrower’s circumstances. Therefore, a policy-rate hold does not necessarily mean every advertised mortgage rate will remain unchanged.

Homeowners approaching renewal should consider beginning their review approximately 90 to 120 days before maturity. This allows time to compare products, correct credit-report issues, assemble income documents and evaluate whether refinancing or switching lenders would be beneficial.

Do not treat a renewal notice as the only option

An existing lender may send a convenient renewal offer requiring only a signature. Convenience, however, does not always produce the most suitable combination of rate, term, prepayment flexibility and future options.

Before renewing, consider:

  • Whether a fixed or variable rate fits your budget and risk tolerance
  • The appropriate term rather than automatically selecting five years
  • Prepayment privileges and penalties
  • Portability if you might sell or move
  • Whether you need to consolidate higher-interest debt
  • Your plans to renovate, invest or access equity
  • Whether the mortgage permits additional payments without penalties
  • The total borrowing cost—not only the advertised interest rate

A lower rate can still be less attractive if the mortgage has restrictive conditions or a costly prepayment formula.

Switching lenders may be easier for some borrowers

OSFI does not expect federally regulated lenders to apply the minimum qualifying rate to an uninsured “straight switch” at renewal when the borrower moves the mortgage to another federally regulated lender without increasing the loan amount or amortization.

This can make it easier for an eligible borrower to compare lenders rather than remaining with the existing lender solely because of the stress test. The exception is limited. Increasing the mortgage balance, extending the amortization, consolidating debt or making other material changes may turn the transaction into a refinance and require full qualification. Legal, appraisal, discharge, registration or administrative costs may also apply.

Fixed versus variable: there is no universal answer

A fixed-rate mortgage offers predictable payments for the selected term. This can be valuable when household cash flow is tight or payment stability is the priority.

A variable-rate mortgage may benefit from future policy-rate reductions, but payments or amortization can be affected if rates rise. Borrowers should understand whether the product has adjustable payments or fixed payments and what occurs if its trigger rate or trigger point is reached.

The better choice depends on income stability, available savings, risk tolerance, expected ownership period and the ability to absorb payment changes—not on a single interest-rate forecast.

BC and Alberta markets require local analysis

Housing conditions vary significantly across provinces and property types. BCREA forecasts that British Columbia’s average residential price will decline approximately 1.2% in 2026 to $941,800, while active listings remain near their highest level since 2015.

In Alberta, local conditions also vary. Calgary reported slower sales and new listings during August, while Greater Edmonton recorded 2,143 August sales—down 15.4% from July and 9.8% from August 2025.

These figures do not determine the value or financing prospects of an individual property. Property type, location, condition, marketability, rental income and comparable sales remain important.

When alternative or private lending may be considered

Borrowers who do not qualify under traditional bank guidelines may consider credit unions, alternative lenders or private mortgage lenders.

Alternative lending may be suitable for borrowers with self-employed or non-traditional income, a recent credit issue, higher debt-service ratios, a property that does not meet conventional guidelines, a need for short-term bridge financing, a time-sensitive purchase or refinance, or a clear plan to return to conventional financing.

Private mortgages generally focus more heavily on property equity and the borrower’s exit strategy. They may offer greater flexibility and faster decisions, but commonly involve higher rates, lender fees, brokerage fees, legal costs, appraisal costs and shorter terms.

A private mortgage should normally have a realistic exit plan—such as improving credit, documenting income, selling the property, completing construction or refinancing with an institutional lender. It should not be treated as a permanent solution without carefully reviewing the cumulative cost.

Beginning October 13, 2026, BC’s new Mortgage Services Act framework introduces updated licensing, representation, suitability, risk-disclosure, remuneration and conflict-of-interest requirements for mortgage services. BCFSA states that brokers must explain why a proposed mortgage is suitable despite any identified material risks.

A practical renewal checklist

  1. Review your maturity date and current payout balance.
  2. Obtain your credit report and correct inaccuracies.
  3. Prepare current income and property documents.
  4. Compare your lender’s offer with other available products.
  5. Confirm penalties, privileges, fees and restrictions.
  6. Consider whether changing the balance or amortization is necessary.
  7. Test the proposed payment against your household budget.
  8. If using alternative or private financing, document a credible exit strategy.

Sources

General-information disclaimer: This article is provided for general informational purposes only and does not constitute mortgage, investment, legal, accounting or tax advice. Mortgage availability, rates, fees, qualification requirements and property values vary by lender, borrower, property and date. Alternative and private mortgages may involve higher costs and risks. Obtain independent professional advice and review all disclosures before entering into a transaction.