Worried about your mortgage renewal payment? What to do before your term ends

If your mortgage term ends in the next year or so, your lender will quote a new rate, and for many households the payment will be higher. In its May 2026 Financial Stability Report, the Bank of Canada said the last of the five-year fixed-payment mortgages taken out during the pandemic would renew over the following 12 months. That group makes up about 12% of the mortgages now outstanding across the country, and its payments are expected to rise by about 15% on average.¹ If you are asking what to do when a mortgage renewal payment is more than your budget allows, the useful moves come well before the renewal date.

How big is the renewal squeeze?

The Bank of Canada’s assessment is not alarmist. It describes household stress as broadly unchanged, with most mortgage holders managing the higher payments they have faced since 2025. About 1.3% of mortgage holders were more than 60 days late on at least one account, compared with about 2.5% of people without a mortgage. The Bank expected nearly all of the borrowers facing large increases to have renewed by the second half of 2027.¹

RBC Economics adds a caution. It says a final group of borrowers who locked in ultra-low five-year rates in 2021 and 2022 has yet to adjust, while some on shorter terms may still renew below 2023 rates. It also expects rising bond yields to push the national debt service ratio up again.² The C.D. Howe Institute, in a report published on Oct. 14, singled out Toronto and Vancouver homeowners with heavy mortgage debt who took on loans when rates were low and are renewing at substantially higher rates.³ For the wider picture, see our look at who carries the strain.

What should I do before my mortgage renews?

The Financial Consumer Agency of Canada (FCAC) offers a sequence that holds up well:⁴

• Look for your renewal statement. A federally regulated lender, such as a bank, must send one with at least 21 days’ notice. It must show your balance, rate, payment frequency, term and any fees.
• Start early. The FCAC advises shopping around a few months before your term ends rather than waiting for the letter. If you do nothing, the renewal may be automatic.
• Negotiate. You may qualify for a lower rate than the one quoted, and offers from other lenders give you something to point to.
• Compare switching costs. Moving to another lender can bring set-up, appraisal and administration fees. You may also owe a new mortgage insurance premium if your loan amount rises or you lengthen your amortization.

Is it a good idea to extend my amortization?

Stretching the repayment period lowers the monthly payment, which can be the difference between a workable budget and a missed payment. It has a cost. The FCAC’s advice is blunt: “Think twice before extending your amortization to lower your payments.”⁴ The agency says the extra interest can cost thousands, and possibly tens of thousands, of dollars.⁴ For some households it is still the right short-term choice, as long as they understand what it costs over time.

What if the budget still doesn’t work?

Look at the whole picture, not just the mortgage. If credit cards, lines of credit or other unsecured debts are taking a large share of your income, easing those can free room for the mortgage. The FCAC lists consolidating higher-interest debts into a mortgage as something to consider at renewal.⁴ That spreads the debt over a longer period and secures it against your home, so it carries risks of its own.

A Licensed Insolvency Trustee can look at your debts as a whole. In a consumer proposal, the OSB says you generally keep your assets as long as you make your payments to secured creditors, which includes your mortgage lender.⁵ Debts secured by your principal residence, such as the mortgage, are also not counted toward the $250,000 limit.⁵ So a proposal would not change your mortgage payment, but it could reduce what you pay on unsecured debts. It affects your credit, and you would need income steady enough to keep every payment going. Harris & Partners has a page on mortgage debt help that outlines the relief options and answers common mortgage debt questions. Our guide to consumer proposals covers the process.

The OSB notes that trustees typically do not charge for a first consultation.⁶ If you are already behind on mortgage payments, talk to your lender early. Lenders generally have more options before arrears pile up than after.