Renewing in the Next Year? Why Your Payment Could Jump and What to Do Now

Short answer: If you locked in your mortgage in 2020 or 2021, your renewal payment could be noticeably higher, because fixed rates follow bond yields and yields are several times higher now. The good news is you have options, and they’re best when you start 4 to 6 months before your renewal date.

By Tim Lacroix, Mortgage Broker. Written October 20, 2026. Rates are illustrative and subject to change.

Why do fixed rates follow bond yields and not the Bank of Canada?

Most people watch the Bank of Canada. That makes sense for variable rates, which move with prime.

Fixed rates are different. Lenders price them off Government of Canada bond yields, mostly the 5 year. When yields go up, fixed rates follow, sometimes within days. That’s why fixed rates can rise even when the Bank of Canada holds steady.

In early October, Canadian Mortgage Professional reported that 5 year yields had climbed to about 3.7% (Canadian Mortgage Professional). They have eased a little since, closing at 3.525% on October 16 (Canadian Mortgage Trends).

What does that mean if I locked in during 2020 or 2021?

Back in 2020 and 2021, 5 year yields sat under 1%. Today’s level is more than three times that (Canadian Mortgage Professional).

A lot of Calgary homeowners signed a 5 year fixed in those years at rates we may not see again for a while. When that term ends, the new rate will likely be higher, and so will the payment. Rates are illustrative and subject to change, and your number depends on your balance, your amortization and the lender.

How many people will pay more?

The Bank of Canada’s own staff looked at this. In a July 2025 staff analytical note, they estimated that about one third of all mortgage holders are likely to see payment increases by the end of 2026. For 5 year fixed borrowers renewing in 2026, they estimated an average payment increase of about 20% (Bank of Canada).

Not everyone is in the same boat. The same note expected many variable rate borrowers with adjustable payments to see their payments come down. It really depends on what you have today.

What if the new payment worries me?

First, you’re not alone, and it’s much easier to fix early than late. Here’s what helps most:

1. Start 4 to 6 months before your renewal. That’s when most lenders will let you hold a rate. Some hold for 120 days, and a few for longer (Rates.ca). Starting early gives you time to compare without pressure.
2. Compare lenders. Your bank’s renewal letter is usually not its best offer, and it won’t show you what anyone else would do. For a straight switch of the same balance and amortization, federally regulated lenders no longer require you to requalify under the stress test, so switching is easier than many people think. Here’s how to decide whether to stay or switch lenders.
3. Ask about a longer amortization. Stretching the time you take to pay off the mortgage can lower the monthly payment. You’ll pay more interest over time, so it’s a trade off, but it can give your budget room to breathe. Whether it’s possible depends on the lender and your situation.
4. Get a rate hold in place. It costs nothing to have us set one up. If rates drop before your renewal, you can still get the lower rate. If they rise, you’re protected. Here’s how a rate hold works.
5. Look at the whole picture. If you’re carrying credit card or loan balances, renewal can be a good time to look at using home equity to consolidate debt, since there’s no penalty at the end of your term.

What happens if people wait too long?

Out in B.C., we’re seeing what happens when payments rise and there’s no plan. Zealty.ca counted 232 court ordered residential sales across Greater Vancouver, the Fraser Valley and Chilliwack from January to July 2026, up 66% from 140 in the same period of 2025 (Zealty).

That’s not Calgary, and it’s not a reason to panic. It’s a reminder that the time to talk is before the payment becomes a problem, not after. If you’re worried, reach out early. Everything stays private.

What about the Bank of Canada decision on October 28?

A Bank of Canada move mostly affects variable rates and lines of credit. If you’re renewing into a variable, or just want to understand what’s coming, read what the October 28 decision could mean for your payment.

Want a private renewal review?

Start my renewal review. Send us your renewal date and, if you have it, your renewal letter. We’ll compare 50+ lenders, show you your options side by side, and help you put a rate hold in place. No cost for most renewals. Prefer to talk? Call or text Tim at 403-648-1541.

Frequently asked questions

Why is my renewal payment going up if the Bank of Canada hasn't raised rates?

Fixed mortgage rates follow Government of Canada bond yields, not the Bank's policy rate. The 5 year yield climbed to about 3.7% this fall, compared with under 1% in 2020 and 2021, when many of today's renewing mortgages were signed.

How many Canadians will pay more at renewal?

A Bank of Canada staff analytical note from July 2025 estimated that about one third of all mortgage holders are likely to see payment increases by the end of 2026, with 5 year fixed borrowers renewing in 2026 facing an average increase of about 20%.

What can I do if I can't afford my new renewal payment?

Start early, 4 to 6 months before renewal. Compare lenders instead of signing the first offer, ask whether a longer amortization would lower the payment, and put a rate hold in place. Talk to a broker before you fall behind, while you still have the most options.

This article is general information, not personal financial advice. Rates, rules and programs change. Talk to a licensed mortgage broker about your situation. Lacroix Mortgage Group is licensed and powered by Mortgage Connection Inc.