Upcoming mortgage renewals are expected to have an uneven impact on Canadians in 2026, with households facing either sharp payment increases or meaningful relief.
For most of this year, households renewing mortgages taken out during the pandemic’s low-rate period will face significant increases in payments. Borrowers with five-year fixed-rate mortgages should brace for a roughly 20 per cent increase, while five-year variable-rate borrowers with fixed payments could see their monthly payments rise by nearly 40 per cent, says Tiago Figueiredo, a macro strategist at Desjardins, in a report.
However, mortgage renewal rate spikes are only half the story, he adds. Many borrowers took out mortgages during the Bank of Canada’s rate-hiking cycle and deliberately chose shorter terms. Desjardins’ simulations suggest payments for those borrowers could fall by as much as 20 per cent this year.
Some Canadians will face higher renewal rates after locking in during the Bank of Canada’s pandemic-era cuts. Others who chose short-term mortgages during the rate-hike cycle could now see payments fall. · Statistics Canada
As a result, payment shocks in 2026 are expected to be polarized, with households clustered around either meaningful increases or meaningful decreases. That leaves the median payment shock for 2026 to be near zero, Figueiredo says.
Still, some homeowners are in for significant financial strain.
“The self-reported likelihood of missing a debt payment in the next three months has risen to cycle highs, with homeowners indicating growing concerns about their ability to service debt,” he said. “That’s occurred as arrears across a host of debt products have continued to trend higher.”
As a result, the economy is “not out of the woods just yet,” Figueiredo warns.
At the same time, many homeowners have been working to pay down debt. Non-scheduled mortgage payments increased between 2023 and 2025 compared with pre-pandemic years, which should help limit payment shocks for those borrowers.
By 2027, most renewing mortgages should see lower monthly payments, Figueiredo says. Population growth is also expected to resume, while fiscal policy should provide stronger support for the economy.