The Mortgage Renewal Cliff Report
Canadians who locked in near 1.99% during the pandemic are renewing into rates near 4.79%. On a typical $500,000 mortgage, that adds about $590 a month — $7,076 a year, a 28% jump — and up to $1,179/month on a $1M mortgage.
The data: renewal payment shock by mortgage size
Monthly payment before vs after renewal — a 5-year fixed signed at 1.99% on a 25-year amortization, renewing at 4.79% with 20 years left (methodology).
| Mortgage balance | Payment at 1.99% | Payment at 4.79% | Increase / month | Increase / year |
|---|---|---|---|---|
| $400,000 | $1,692 | $2,164 | +$472 (+28%) | +$5,661 |
| $500,000 | $2,115 | $2,705 | +$590 (+28%) | +$7,076 |
| $750,000 | $3,172 | $4,057 | +$885 (+28%) | +$10,614 |
| $1,000,000 | $4,230 | $5,409 | +$1,179 (+28%) | +$14,152 |
Source: Mortgage Squad Advisors analysis, 2026. Illustrative estimates; your figure depends on your balance, rate and remaining amortization.
Why the cliff is real
A large share of Canadian mortgages were taken or renewed during the 2020–2021 window, when five-year fixed rates fell to historic lows near 1.99%. Those five-year terms mature in 2025 and 2026 — and today’s five-year fixed sits near 4.79%, more than double. The result is a step-change in monthly cost for millions of households renewing into a very different rate environment than the one they signed into.
The shock is real but not unmanageable. The biggest mistakes are auto-renewing the bank’s first offer and assuming nothing can be done. You can shop the market, extend the amortization to lower the payment, make lump-sum prepayments before renewal, or — if you signed high and rates have fallen — weigh breaking early against the penalty (see our Big Bank Mortgage Penalty Report). Model your own number with the payment shock calculator.
Figures use standard Canadian semi-annual-compounded mortgage math. Scenario: a five-year fixed signed at 1.99% on a 25-year amortization; after the 5-year term, the remaining balance is renewed at 4.79% over the remaining 20 years. We compare the monthly principal-and-interest payment before and after. Rates are representative of the 2021 lows and 2026 levels. These are illustrative estimates; an individual’s renewal payment depends on their exact balance, rate and remaining amortization. Analysis by Mortgage Squad Advisors (FSRA #13737), 2026.
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