With over 1.15 million Canadian mortgages coming up for renewal this year, the decisions homeowners make in the next few months will shape their household finances for the next three to five years. Most of them will make those decisions without talking to a broker first.
The Renewal Wave Nobody Prepared For
Between 2020 and 2022, interest rates in Canada sat at historic lows. The Bank of Canada’s overnight rate dropped to 0.25 percent in March 2020 and stayed near those levels for nearly two years. Canadians who bought homes or refinanced during that period locked into mortgages at rates of 1.5 to 2.5 percent, sometimes even lower.
Those mortgages are now coming due. Approximately 1.15 million Canadian mortgages will renew in 2026 alone, with another 940,000 following in 2027. TD Bank reports that 85 percent of mortgages renewing in 2025 and 2026 were originally opened when the Bank of Canada’s key lending rate sat at or below 1 percent.
As of May 2026, the best 5-year fixed rates available through independent mortgage brokers sit around 3.9 percent. Variable rates are around 3.3 to 3.4 percent. On a $600,000 mortgage moving from 1.9% to 3.9%, the monthly payment increases by approximately $600. Over a 5-year term, that is $36,000 in additional interest. The rate you negotiate at renewal determines whether that number is closer to $36,000 or closer to $20,000. Explore our current low mortgage rates to see what is available right now.
What Mortgage Renewal Actually Means
A mortgage renewal is not simply the automatic continuation of your existing mortgage. It is the end of your current term and the beginning of a negotiation for what comes next. Your lender is required to notify you at least 21 days before your maturity date, and they are required to give you an offer. They are not required to give you their best offer.
This distinction matters enormously. The rate on the letter your lender sends is typically a posted rate, not a discounted rate. It is the starting point for a negotiation, not the conclusion of one. Most Canadians treat it as the conclusion — they sign within two weeks because the process feels complete and nobody called to tell them otherwise.
At renewal, you have three distinct paths available to you regardless of what your bank’s letter says:
- Switch Lenders: Move your existing mortgage balance to a new lender at renewal with zero penalty and zero legal fees — one of the most underused financial options available to Canadian homeowners.
- Refinance: Restructure your mortgage entirely to access home equity, consolidate high-interest debt, fund a renovation, or change your amortization.
- Negotiate at Your Current Lender: Stay with your current lender but push back on their initial offer. When a mortgage broker is involved, lenders typically improve their offer.
Learn more about all your options through our full range of mortgage services.
Why Your Bank’s First Offer Is Not Their Best
Canadian banks operate on a straightforward assumption at renewal: most clients will sign without shopping. The bank’s posted renewal rate is designed to extract maximum margin from clients who do not push back. Banks reserve their most competitive rates for new purchase clients who are actively comparing options. Renewal clients already have a relationship and a history — the bank prices their renewal offers to reflect that inertia.
What changes when a broker is involved is simple: the bank knows you have options. When a broker submits your renewal file alongside competing offers from other lenders, the bank’s negotiating position shifts. They move on their rate — not always to the lowest number in the market, but meaningfully lower than their first offer.
The 120-Day Rate Hold Strategy
One of the most powerful and least known tools available at renewal is the 120-day rate hold. Many lenders will lock in today’s rate for up to 120 days before your mortgage matures, at no cost. This protects you against rate increases while keeping your options open if rates drop.
In the current environment, this matters. The Bank of Canada held its overnight rate at 2.25 percent on April 29, 2026, but explicitly acknowledged that both cuts and hikes remain on the table for the second half of 2026. Bond markets are pricing a 37 percent probability of a rate hike by July 15. Fixed rates have already moved up from 3.79 percent in February to approximately 3.9 percent today.
A rate hold does not obligate you to take that rate. It gives you a floor. If rates rise, your held rate protects you. If rates fall, you take the better option. Use our mortgage calculator to model your payments under different rate scenarios.
What the Real Dollar Difference Looks Like
A homeowner in Surrey renewing a $700,000 mortgage balance in May 2026:
- At the bank’s posted renewal rate of 4.29% (5-year fixed): monthly payment approximately $3,790
- At the best broker rate of 3.9% (5-year fixed): monthly payment approximately $3,590
- Monthly difference: $200 — Over the 5-year term: $12,000 saved in interest
Common Renewal Mistakes and How to Avoid Each One
- Starting Too Late: Most borrowers start thinking about renewal when the letter arrives — 21 to 30 days before maturity. Starting 120 days out gives you the full range of options.
- Assuming You Cannot Switch Lenders: At renewal, you can switch lenders with no legal fees and no penalty. Penalties only apply when you break a mortgage before the term ends.
- Treating Renewal as a Formality: The renewal conversation is one of the most significant financial decisions a homeowner makes every three to five years. It deserves the same attention as the original purchase.
- Forgetting to Reassess Your Needs: A lot changes in five years — income, equity, debt. Renewal is not just a rate question. It is a review of your entire financial position.
The Renewal Timeline: When to Do What
- 120 days out: Contact a mortgage broker and begin the renewal review. Secure a rate hold from at least one lender.
- 90 days out: Compare competing offers from multiple lenders against your current lender’s preliminary offer.
- 60 days out: Make your decision on lender, term, and rate type. Begin paperwork if switching.
- 30 days out: Final documentation. Confirm all conditions are met with your chosen lender.
Start Your Renewal Conversation Today
Mortgage Wisdom has operated in Surrey and the Lower Mainland for 14 years. With access to over 50 lenders including major banks, credit unions, trust companies, monolines, and alternative lenders, we broker the entire market on your behalf. The conversation with your existing lender happens last — from a position of full market knowledge.
If your mortgage is renewing in the next 12 months, the most valuable thing you can do today is start the conversation before your bank does. Apply now or contact our team at Mortgage Wisdom — the first conversation costs nothing.