Mortgage Renewal Calculator Canada

See how different renewal rates affect your total interest — and what you can do about it

2026 Renewal Context: Hundreds of thousands of Canadians are renewing mortgages originally taken out at historically low rates in 2020–2021. Many are facing higher rates at renewal. This calculator helps you compare scenarios and understand the total cost impact.

Mortgage Renewal Calculator — Total Interest Comparison

Compare Multiple Renewal Rate Scenarios

Understanding Mortgage Renewal in Canada

Canadian mortgages have fixed terms (typically 1–5 years) but long amortization periods (20–30 years). At the end of each term, you must renew — either with the same lender or by switching. This renewal process is a critical financial decision, yet many Canadians simply accept whatever rate their current lender offers. Shopping at renewal can save tens of thousands of dollars.

The Renewal Spike: What Millions of Canadians Face in 2025–2027

During 2020–2021, Canadian mortgage rates hit historic lows — many borrowers locked in 5-year fixed rates at 1.5%–2.5%. Those mortgages are now coming up for renewal in 2025–2026. Even at today's more moderate rates of 4%–5%, the monthly payment shock for these borrowers is substantial. A $500,000 mortgage at 1.99% cost $2,106/month (25-year amortization); at 4.44%, the same balance costs $2,740/month — an increase of over $600/month or $7,200/year.

Your Rights at Renewal

You are under no obligation to stay with your current lender at renewal. Switching is free at renewal (no penalty). You can negotiate with your current lender or walk away to a competitor. Your lender must send you a renewal offer 21 days before your term ends under OSFI guidelines. Take that 21-day window seriously — it's your best leverage point.

Renewal Strategy for 2026

Option 1: Short-Term Fixed Rate

If you expect rates to continue falling, a 1-year or 2-year fixed rate limits your exposure to today's rates and positions you for a potentially lower rate in 1–2 years. The tradeoff: you might be wrong about rate direction, and shorter terms typically have slightly higher rates than 5-year fixed.

Option 2: 5-Year Fixed Rate

If you value payment certainty and believe today's rates represent fair long-term value, a 5-year fixed locks in predictability. You're protected if rates rise, but miss out if rates fall significantly. Important: understand your lender's penalty structure in case you need to break the mortgage in the next 5 years.

Option 3: Variable Rate

If the Bank of Canada continues easing and variable rates are priced attractively (prime minus a significant discount), a variable-rate mortgage gives you automatic benefit from future rate cuts. The 3-month interest penalty for breaking a variable mortgage is also much lower than IRD on fixed.

Tips for Getting the Best Renewal Rate

  1. Start shopping 4 months early: Most lenders offer rate holds of 90–120 days
  2. Don't just accept the renewal notice: Your lender's first offer is rarely their best
  3. Get quotes from a broker: They access lenders your current bank doesn't compete with
  4. Consider switching lenders: New lenders often offer better rates to attract your business
  5. Check if your lender charges a switch fee: If they do, factor it in — often $300–$1,000
  6. Make a lump-sum payment at renewal: If you have savings, renewal is a perfect time to reduce principal

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Last updated: March 2026. Canadian semi-annual compounding used in all calculations. Not financial advice.