The "Renewal Cliff" is Coming: 60% of Canadian Mortgages Renew by 2026
Date: December 12, 2025 | Category: Mortgage Strategy, Market News | Reading Time: 6 Minutes
If you bought your home or renewed your mortgage during the "pandemic lows" of 2020 or 2021, you likely secured an incredible rate—perhaps as low as 1.79%.
But the clock is ticking.
A new report confirms that 60% of all outstanding mortgages in Canada will renew between now and the end of 2026. For millions of homeowners in Surrey and Vancouver, this means trading a record-low rate for a market rate that could be 2% to 3% higher.
The media calls it the "Renewal Cliff." At Kraft Mortgages, we prefer to call it a "Strategy Pivot." Here is exactly what you need to know to handle the jump.
The Math: What Does "Payment Shock" Actually Look Like?
Let's look at a typical Surrey mortgage to see the real impact.
📋 The Scenario
You have a $600,000 mortgage balance.
Current Rate (2021): 1.99%
Renewal Rate (2026 Forecast): ~4.49%
⚡ THE PAYMENT SHOCK REALITY
That's an extra $9,600 per year in after-tax income you need to find.
Don't Just "Auto-Renew" (The Bank's Trap)
The biggest mistake you can make is waiting for your bank's renewal letter to arrive in the mail and simply signing it out of fear. Banks bank on your inertia. They often offer existing clients a rate that is 0.10% to 0.20% higher than what they offer new clients, knowing you probably won't shop around.
3 Strategies to Soften the Landing
If you are facing a renewal in 2025 or 2026, you have options beyond just "paying more."
1. The "Amortization Reset"
If the new monthly payment destroys your household budget, we can look at extending your amortization.
How it works: If you have 20 years left on your mortgage, we might be able to refinance and reset it back to 25 or 30 years.
The Result: This spreads the payments out, significantly lowering your monthly obligation.
2. Shop the "Switch" Market
Thanks to new OSFI rules, it is now easier to switch lenders at renewal without passing the Stress Test (for uninsured mortgages).
The Opportunity: We can take your file to 50+ lenders to find who is hungriest for your business, potentially saving you thousands over the term.
3. Pre-Payment Strategy (Start Now)
If your renewal is still 6-12 months away, use your current "low rate" privileges to make lump sum payments now.
The Logic: Every $1,000 you knock off the principal today is $1,000 you won't have to renew at 4.5% later.
The Bottom Line
The "Renewal Cliff" is real, but it doesn't have to push you over the edge. The key is starting the conversation 6 months early, not 2 weeks before your term expires.
Is your renewal coming up in 2026?
📅 Book a 15-min Renewal ReviewLet's run the numbers on an "Amortization Reset" and see how much cash flow we can save you.
About Varun Chaudhry
Licensed mortgage broker with over 18 years of experience in the Canadian mortgage industry. Specializing in MLI Select, construction financing, and self-employed mortgages across BC, AB, and ON.