Payment Shock 2026: Why Many Renewals May Jump 20%

What’s driving the sharp renewal increase forecast for 2026 and how homeowners can prepare.

A large wave of Canadian mortgages comes due through 2026. Bank of Canada staff estimate roughly 60% of outstanding mortgages will renew in 2025 and 2026. Five-year fixed borrowers who locked in during 2020 or 2021 face some of the biggest adjustments, with typical payment increases in the 15% to 20% range at renewal, depending on rate path and remaining amortization.

Why 2026 Bites

1. The renewal bulge: Pandemic-era originations are maturing together. Both the Bank of Canada and OSFI have flagged the concentration of renewals by the end of 2026 as a systemic risk that could stress borrower budgets and lender portfolios.

2. Rate reset math: Even if rates drift lower from their 2023 and 2024 peaks, many 2020 and 2021 mortgages will still renew at 1.5 to 2 percentage points higher than their original rate. According to Bank of Canada modeling, this equates to mid-teens to near-20% payment lifts for a large share of five-year fixed renewals.

3. Amortization catch-up: Variable-rate borrowers who kept payments static during 2022 to 2024 effectively extended their amortization. When those loans reset, amortization “catch-up” adds pressure even if headline rates fall.

4. Tighter oversight: Regulators are instructing lenders to monitor higher-risk renewals closely. The Financial Consumer Agency of Canada (FCAC) released updated guidance in 2025 requiring lenders to proactively contact borrowers facing hardship and offer payment relief options.

How to Estimate Your Own Jump

Confirm your maturity date and balance. You can find this on your renewal letter or lender portal.
Run a renewal quote with today’s rates plus a 0.5 to 1.0% buffer. That is a realistic “stress-tested” range.
Review your amortization schedule. If your amortization grew due to variable-rate underpayment, expect your new payment to rise even more as it resets.
Model your total housing costs. Include taxes, insurance, utilities, and maintenance, not just the mortgage payment.

Tactics to Blunt the Shock

1. Lock early. Most lenders offer 120-day rate holds. Securing one can protect you from pre-renewal spikes.

2. Adjust the amortization. Extending from 25 to 30 years can soften the monthly impact. Just ensure you have a plan to shorten it later.

3. Make pre-renewal payments. Even small lump sums reduce the balance that your renewal payment is calculated on.

4. Shop the market. Many lenders will offer no-fee switches to attract strong borrowers. Compare both fixed and variable offers.

5. Blend strategically. If rates drop before maturity, a blend and extend may offer stability without penalties.

6. Fix what you can predict. If volatility stresses you, choose a fixed term that balances rate and flexibility.

7. Build a cash buffer. Aim for three to six months of housing costs in savings or available credit.

8. Eliminate high-interest debt. Pay off credit cards or loans before renewal. It improves ratios and rate eligibility.

9. Know your hardship options. Lenders can temporarily adjust terms for borrowers in good standing. FCAC’s 2025 guideline ensures fair treatment and transparency.

What If Rates Drift Lower Before You Renew

If the Bank of Canada begins rate cuts before your renewal window, it may ease some pressure, but do not count on a full rollback to pandemic-era levels. Remember, payment savings only lock in when you actually renew, not when you see headlines.

Hold your rate, monitor the bond market, and re-price before closing if yields move in your favor.

A Quick Case Study

Original mortgage: $500,000, five-year fixed from late 2021 (25-year amortization) Renewal in 2026: Approximately $425,000 balance

Scenario A: Renew at a rate 1.75% higher than the original. Payment jump of about 18%.
Scenario B: Extend to 30 years, prepay $10,000 before renewal, then add $150 monthly once renewed. This trims the payment shock to under 10% and preserves long-term flexibility.

Broker Checklist Before You Sign

Get written quotes from multiple lenders.
Compare effective rates after cash-back or switching costs.
Review penalty and portability clauses.
Confirm prepayment flexibility and amortization options.
Have updated income documentation ready for any refinance.

Bottom Line

Payment shock is coming, but it does not have to be devastating. With early preparation, accurate modeling, and a few tactical adjustments, most homeowners can absorb the 2026 renewal wave without major financial disruption.

The key is acting early, not waiting for renewal notices to arrive in the mail. A proactive broker or financial advisor can model your options now and save you thousands later.

Written by the team at BBM

5 Mortgage Myths That Could Be Holding You Back

Mortgage Tips 14 Oct

There’s no shortage of mortgage advice out there. From online forums to coffee shop conversations, everyone seems to have an opinion. Some of it’s helpful. A lot of it? Not so much.

The truth is, the mortgage world has changed—especially in Canada. Rules, products, and opportunities evolve, but a lot of the advice being passed around hasn’t kept up.

So let’s slow it down and clear up five of the most common myths heard from homeowners and buyers alike—because sometimes, knowing what’s not true can be just as powerful as knowing what is.

Myth #1: You Need 20% Down to Buy a Home

This one stops a lot of buyers before they even get started.

Yes, putting 20% down eliminates the need for mortgage default insurance, but it’s not a requirement—especially for first-time buyers. In Canada, if the home is under $500,000, you can get in with just 5% down. For homes between $500,000 and $1,499,999, the minimum down payment is tiered: 5% on the first $500K, and 10% on the remainder.

The result? You don’t need to hit that 20% mark to make homeownership a reality. And while you will pay mortgage insurance with less than 20% down, it’s often a worthwhile trade-off if it means entering the market sooner or keeping cash on hand for emergencies, renovations, or investments.

Myth #2: Your Bank Is the Best Place to Get a Mortgage

It might feel easier to “just go with your bank,” especially if that’s who you’ve always dealt with. But here’s the thing: your bank can only offer their rates, terms, and products. That’s it.

A mortgage broker isn’t tied to one institution. They work with multiple lenders—including banks, credit unions, and independent mortgage companies—to find the product that fits your specific goals and circumstances. That matters a lot if you’re self-employed, have less-than-perfect credit, or just want a better deal.

More options = more negotiating power, better structure, and a greater chance of finding a mortgage that actually aligns with your life.

Myth #3: The Lowest Rate Is Always the Best Deal

We’ve all seen the ads. “Lowest mortgage rate in Canada!” Sounds great—until you read the fine print.

Some of the lowest-rate mortgages out there come with significant limitations: strict penalties if you break the term early, zero prepayment privileges, or clauses that make it difficult to move or refinance. And in real life, those things matter.

What if you need to break your mortgage to access equity? Or sell unexpectedly? Or refinance to consolidate debt?

The best mortgage isn’t just about the rate—it’s about flexibility, protection, and long-term cost. A slightly higher rate on a mortgage that fits your life could save you far more in the end than a “no-frills” option with hidden landmines.

Myth #4: You Have to Wait Until Your Term Is Up to Refinance

Many people think they’re locked in until their term ends. That’s not true.

You can refinance a mortgage before the term is over. Yes, there may be a penalty—but in some cases, it’s more than worth it. For example, if you’re carrying high-interest debt, funding a major renovation, or need to tap into your home equity for a business or investment, the potential savings or returns may easily outweigh the cost of breaking the mortgage.

The key is running the numbers. A good mortgage advisor will help you calculate whether it makes sense now—or if it’s better to wait.

Myth #5: Renewing with Your Current Lender Is the Easiest—and Smartest—Move

When your mortgage comes up for renewal, it’s tempting to take the path of least resistance. Your current lender sends a renewal notice, and all you have to do is sign.

But here’s what many people don’t realize: lenders often reserve their best rates and promotions for new customers, not existing ones. In fact, renewing without shopping around could mean paying more than you need to—sometimes for the next five years.

Renewal time is a golden opportunity to review your situation, compare options, and even adjust your mortgage strategy. You’ve got leverage, and you should use it.

The Bottom Line

There’s a lot of noise out there. And while mortgage advice might be well-intentioned, it’s not always accurate—or right for your situation.

Getting clarity means asking better questions, exploring your options, and working with someone who looks beyond just rate. Whether you’re buying your first home, refinancing to unlock equity, or preparing for renewal, having the right information (and the right support) can make a huge difference in your financial future.

Because in the mortgage world, the right strategy is worth more than the right guess.

Written by the team at BBM

Smart-Sizing: Making Your Home Work for You

General 9 Oct

For many Albertans heading into retirement, the family home isn’t just where memories were made — it’s also where a big chunk of their wealth is sitting. Your home is likely your biggest asset, and while it offers stability, it can also tie up your money in space you might not really need anymore.

That’s where smart-sizing comes in.

Unlike the old-school idea of “downsizing,” smart-sizing isn’t about giving things up — it’s about adjusting your living situation so it fits your life now: your lifestyle, your goals, and your future plans.

Unlocking Your Home’s Equity

When you sell your larger home and move into something smaller or more efficient, you unlock the equity you’ve built over the years. That money can go toward investments, retirement savings, paying off debt, or even just giving yourself more flexibility and peace of mind.

For many retirees, this is one of the best ways to supplement income without relying fully on pensions or government benefits.

Lower Costs, Less Stress

A smaller home typically means lower utility bills, less maintenance, and lower property taxes — all of which can add up over time. Even if you choose a more desirable area or newer build, the efficiency and reduced upkeep usually mean you’ll still come out ahead financially.

Living Better, Not Smaller

Retirement should be about freedom — not more rooms to clean or lawns to mow. Smart-sizing often means moving closer to the things that matter most: family, healthcare, amenities, or simply a community that fits your pace. You trade square footage for convenience, connection, and comfort.

A Quick Example

Let’s say a couple sells their suburban home for $800,000 and buys a $550,000 condo closer to the city. They free up $250,000 in equity, and their annual maintenance and utility costs drop by around $6,000.

Over 10 years, that’s hundreds of thousands of dollars that can go toward travel, health, or just enjoying a worry-free retirement.

Before You Make the Move

Smart-sizing takes planning. Ask yourself:

How much equity will I actually unlock after selling and buying?

Will this new home truly reduce my ongoing costs?

Does the location fit the lifestyle I want for retirement?

What’s my plan for reinvesting the extra equity?

The Bottom Line

Smart-sizing isn’t about living with less — it’s about living better with what you have. When you align your home with your goals, you can free up equity, reduce stress, and make retirement more comfortable and financially secure.

Written by the marketing team at Breaking Banks