05/04/2026
CASH FLOW more important that rates...
Here is a really good article written by Christopher Liew, featured in BNN Bloomberg
If your mortgage is up for renewal this year, you’re part of one of the largest renewal cycles Canada has ever seen. Roughly 1.15 million Canadian households are renewing in 2026, according to the CMHC’s Fall 2025 Residential Mortgage Industry Report.
According to a July 2025 Bank of Canada staff analysis, most of those borrowers will see payments rise. Five-year fixed renewers are facing average payment hikes of 15 to 20 per cent versus what they paid in December 2024.
The Bank of Canada held its policy rate at 2.25 per cent on Wednesday, citing rising energy prices and ongoing U.S. tariff pressure. If you were hoping a rate cut would bail you out at renewal, that’s not happening any time soon.
Below, I’ll walk you through the practical steps you can take to soften the blow, regardless of where rates land this year.
1. Start shopping at least 120 days before renewal
This is the single most underused tip I can give you. Most lenders will offer you a rate hold up to four months before your renewal date. That gives you a guaranteed rate, plus the freedom to keep shopping if rates fall.
Auto-renewing with your existing lender on whatever rate they send in the mail is usually a mistake. The first offer is almost never their best one. Recent Equifax Canada data shows 56 per cent of mortgage holders plan to explore switching lenders at renewal in search of a better deal.
When you switch lenders on a straight renewal, you typically no longer have to requalify under the federal stress test. The Office of the Superintendent of Financial Institutions (OSFI) changed that rule in November 2024. That’s a big deal if your income or credit picture has changed since you originally qualified.
2. Get honest about your full financial picture. Before you commit to a higher rate for five years, run the numbers on your whole household, not just the mortgage line. If your new payment is going to swallow more of your take-home pay than you can sustainably afford, a longer amortization or a different term structure might serve you better than chasing the lowest headline rate.
Cash flow is what keeps you out of trouble. I went deep on the average Canadian’s savings, debt and net worth a recent video, which is worth a watch if you want a benchmark before you sign.
3. Match your term to your cash flow, not a guess about rates
I covered the three-versus-five-year question in a recent CTV News.ca column, so I won’t rehash the whole framework here. The basic idea: a shorter term gives you another shot at renewal sooner, which matters if you think rates are headed lower. A five-year term gives you payment certainty, which matters if your budget is tight and you can’t absorb a surprise.
A variable rate adds another layer of flexibility, since it lets you exit if rates fall meaningfully. None of these is automatically right.
Don’t pick a term based on a guess about where rates are going. Pick it based on your cash flow tolerance and how much certainty you actually need.
4. Talk to your lender about hardship relief if you need to
If the new payment genuinely doesn’t fit, don’t wait until you’ve missed one. The Financial Consumer Agency of Canada issued mortgage relief guidelines in July 2023 that set out expectations for federally regulated lenders to proactively support at-risk borrowers. That includes waiving prepayment penalties, waiving internal fees, not charging interest on interest, and extending amortization.
You still have to push, though. Even with the FCAC guideline, banks don’t always volunteer these the way they’re supposed to. The time to have the conversation is before you fall behind, not after.
A recent CTV New segment covered a TD survey showing 67 per cent of homeowners feel uneasy about their upcoming renewal, with 56 per cent already cutting household spending to absorb higher payments. If you’re in that camp, you’re not alone, and there are levers to pull before you reach a crisis point.
5. Use renewal as a chance to clean up other debt
Renewal is one of the few moments where you can refinance, consolidate, or restructure without penalty. If you’re carrying high-interest credit card balances or a line of credit, rolling those into a refinanced mortgage can save you thousands a year.
The catch: you’re trading short-term debt for long-term debt. That only works if you actually change the spending behaviour that created the credit card balance in the first place. Otherwise you’ll be back in the same position in two years, just with a bigger mortgage.
Final thoughts
The mortgage renewal wave isn’t going away in 2026, and the macro environment isn’t going to do you any favours. The good news is that you have more tools than most Canadians realize. Shop early, look at your full financial picture, pick a term that matches your tolerance for uncertainty, and ask your lender for help if you need it. The worst thing you can do is sign whatever shows up in the mail.
