38% of Canadian Mortgage Holders Expect Higher Renewal Payments — and 76% Say It Will Strain Their Finances

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For Canadian homeowners who locked in exceptionally cheap borrowing during the pandemic, the final stretch of the mortgage-renewal cycle is arriving with a complicated mix of relief and unease. New Royal LePage polling of 1,127 Canadians preparing to renew their mortgages found that 38% expect their monthly payment to rise. Among that group, 76% believe the increase will put pressure on household finances.

Those numbers point to a problem that is becoming less widespread but remains painful for many individual families. Interest rates have fallen substantially from their post-pandemic peak, yet borrowers coming off five-year mortgages secured near historic lows can still face noticeably higher costs. The result is less a nationwide mortgage crisis than a prolonged household-budget adjustment—one that can reshape spending, saving and financial decisions for years.

The Final Pandemic-Era Renewal Wave Is Smaller, but Still Significant

The most difficult phase of Canada’s mortgage-renewal cycle appears to be moving toward its end. The Bank of Canada estimates that five-year, fixed-payment mortgages taken out during the pandemic and renewing over the next 12 months represent roughly 12% of all outstanding Canadian mortgages. That is a much smaller group than the enormous volume of borrowers that rolled into higher rates during 2025. Still, the central bank expects this remaining cohort to experience an average payment increase of about 15%.

The latest Royal LePage findings fit that picture. Thirty-eight per cent of respondents expect a higher payment, including 26% anticipating a slight increase and 12% expecting a significant one. Another 31% think their payment will remain roughly unchanged, while 17% expect it to fall. The results come from an online panel of 1,127 Canadians renewing a mortgage, conducted from July 20 to August 6, 2026. Because it was a non-probability online sample, a conventional statistical margin of error cannot formally be assigned. The findings are therefore best viewed as a snapshot of borrower expectations rather than a precise forecast of every renewal.

The Rate Gap Still Hurts Even After the Bank of Canada’s Cuts

The uncomfortable mathematics of renewal begins with just how unusual pandemic borrowing costs were. The Bank of Canada’s policy rate sat at only 0.25% through much of 2021. By the end of 2022 it had reached 4.25%, and after further increases it remained elevated before a long series of cuts brought it back to 2.25%. As of August 19, 2026, the policy rate remains at 2.25%. That is far below the peak, but it is still a very different environment from the one in which many five-year mortgages were arranged.

Even relatively modest rate differences can matter when applied to six-figure balances. Financial Consumer Agency of Canada examples illustrate the sensitivity: on a hypothetical $300,000 mortgage amortized over 25 years, a 2.5% rate produces a monthly payment of about $1,344, while 4.5% produces a payment of roughly $1,660. Real renewals differ because borrowers have already paid down some principal and have different remaining amortizations, but the example shows why a few percentage points can translate into hundreds of dollars a month. Falling rates have softened the impact; they have not eliminated it.

Anxiety Has Eased Considerably From 2025

Borrowers appear less worried than they were during the earlier stages of the renewal wave. In Royal LePage’s latest findings, 43% say they feel about the same regarding their upcoming renewal as they did the last time, while 35% feel more anxious. The greatest anxiety is concentrated among borrowers whose last mortgage agreement was arranged in 2021 or 2022—the period most closely associated with exceptionally low borrowing costs.

The change from early 2025 is notable. At that time, 57% of Canadians renewing during the year expected their monthly payment to increase, compared with 38% in the new data. Among borrowers expecting an increase in 2025, 81% anticipated financial strain; the comparable figure now stands at 76%. Anxiety also varies sharply by location. Forty-five per cent of Vancouver respondents say they feel more anxious than at their previous renewal, compared with 39% in Toronto, 34% in Montreal and 32% in Calgary. Larger outstanding balances in high-priced housing markets can make the same change in interest rates feel considerably more consequential.

For Many Households, the Real Impact Will Be Felt in Everyday Spending

The strongest signal in the new numbers is not necessarily mortgage default risk but pressure on ordinary household choices. Among borrowers expecting higher payments, 46% anticipate a slight strain on household finances and another 30% expect significant strain. Among those bracing for pressure, 58% say discretionary spending will be reduced, 48% expect to cut travel, and 38% plan to postpone or cancel home renovations. A mortgage renewal can therefore reach well beyond the housing budget, affecting restaurants, vacations, contractors, retailers and savings decisions.

That pressure is arriving when Canadian household finances are already carrying substantial debt. Statistics Canada reported that household credit-market debt reached $3.25 trillion in the first quarter of 2026. Canadians held about $1.80 in credit-market debt for every dollar of household disposable income, while the household debt-service ratio rose to 14.75%. The household saving rate, meanwhile, declined to 3.5%. Those national averages hide enormous differences between families, but they help explain why even borrowers capable of making their new mortgage payment may still feel considerably poorer once it begins leaving the bank account every month.

Where Borrowers Live Changes the Renewal Experience

Mortgage pressure is not distributed evenly across Canada. Saskatchewan and Manitoba respondents were the most likely to expect an increase at renewal, at 43%. Ontario, Quebec and Atlantic Canada each registered 39%, British Columbia stood at 37%, and Alberta was lowest at 29%. Yet Alberta produced an interesting reversal: among borrowers there who do expect an increase, 82% anticipate financial strain, the highest share reported. Quebec had the lowest expected-strain figure at 65%.

Big-city data reveal another side of the problem. CMHC reported that Canada’s 90-plus-day mortgage delinquency rate rose from 0.21% in the fourth quarter of 2024 to 0.24% a year later. Toronto’s rate rose more sharply, from 0.20% to 0.29%, while Ontario overall climbed from 0.20% to 0.27%. Vancouver’s rate increased from 0.16% to 0.21%. These percentages remain low, but they demonstrate why national averages can miss concentrated financial stress. A family carrying a large mortgage in Toronto or Vancouver can experience a very different renewal from a similarly paid household with a substantially smaller balance elsewhere.

Mortgage Defaults Remain Rare, but Other Debt Can Flash Warning Signs First

Despite years of warnings about a mortgage-renewal shock, Canada has not experienced a broad wave of homeowners falling behind. CMHC describes the national mortgage system as structurally stable even as borrower stress has risen, and the Canadian Bankers Association reported a national mortgage-arrears rate of 0.29% among reporting institutions as of May 2026. Both measures remain low by historical standards, although their methodologies and coverage differ.

Low mortgage arrears do not mean household pressure should be dismissed. Bank of Canada research has found that borrowers who eventually fall behind on their mortgages often show trouble elsewhere first. Credit-card and line-of-credit use can increase before missed mortgage payments appear. CMHC similarly reported that delinquency rates on credit cards, auto loans and lines of credit rose year over year in late 2025. That behaviour makes intuitive sense: a household facing a cash-flow squeeze may protect the mortgage first and postpone other bills. For lenders and policymakers, therefore, a borrower who keeps the mortgage current may still be experiencing meaningful financial stress behind the scenes.

The Mortgage Stress Test Has Provided a Cushion, Not a Guarantee

One reason the renewal cycle has been less disruptive than originally feared is that borrowers were generally required to demonstrate they could handle rates above the mortgage rate they actually received. Canada’s minimum qualifying rate for uninsured mortgages currently requires borrowers, in applicable cases, to qualify at the greater of their contract rate plus two percentage points or a 5.25% floor. The 5.25% floor was introduced in 2021, meaning many buyers obtaining exceptionally low mortgage rates still had to demonstrate substantially greater payment capacity.

The Bank of Canada concluded in its 2025 financial-stability work that more than 90% of five-year fixed mortgage borrowers facing renewal increases were expected to encounter payment changes smaller than the interest-rate increase against which they had originally been stress-tested. That helps explain why higher payments have translated primarily into tighter budgets rather than widespread defaults. But qualifying for a mortgage several years ago is not the same as having limitless financial room today. Families may now have childcare costs, car loans, higher property taxes or reduced income. A stress test offers an important buffer; it cannot protect every household from every life change.

Renewal Is Also an Opportunity to Reconsider the Mortgage

For borrowers approaching renewal, accepting the first offer in the mailbox is not the only option. In the latest Royal LePage findings, 49% expect to remain with their existing lender, while 44% plan to compare lenders before deciding. Forty-three per cent currently intend to choose a fixed-rate mortgage, 16% favour a variable rate, and 39% say they will examine their options before making a decision. That uncertainty is understandable in a rate environment that has changed several times dramatically since 2020.

Federal rules now give some borrowers more freedom to compete for better terms. OSFI does not expect federally regulated lenders to apply the minimum qualifying rate to an uninsured mortgage transferred directly from one federally regulated institution to another at renewal, provided the loan amount and remaining amortization are not increased. The Financial Consumer Agency of Canada recommends beginning the search several months before renewal, comparing lenders and negotiating rather than automatically accepting a renewal quote. Extending amortization can lower the immediate payment in some circumstances, but it also generally increases total interest costs. The goal is not simply to obtain the smallest payment next month, but to find a structure that remains sustainable for the years ahead.

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