What can you do if your mortgage renewal payment jumps?

Bank of Canada figures put the average renewal increase at about 15 per cent. Since November 2024 an uninsured straight switch skips the stress test.

A mortgage taken out at a pandemic era rate does not renew at a pandemic era rate. For a lot of households in the GTA the renewal letter is the largest single change to their monthly costs in five years, and it arrives with three weeks' notice unless you go looking for it earlier.

The good news is that the rules around a renewal have moved in the borrower's favour since late 2024, and most of what helps is available before you miss a payment rather than after.

How much are renewal payments actually going up?

About 15 per cent, for the group most exposed to it.

The Bank of Canada's Financial Stability Report, published in May 2026, says roughly 12 per cent of outstanding mortgages are pandemic era five year fixed payment mortgages coming up for renewal over the following twelve months, with average payment increases of about 15 per cent.

Two other findings in the same report are worth holding onto, because they are the ones nobody repeats. Borrowers reaching renewal have been getting rates below the qualifying rate they were originally tested at more than 90 per cent of the time. And the share of mortgage accounts more than 60 days behind on payments is only slightly above the 2018 to 2019 average, although arrears did rise among borrowers carrying large mortgage balances relative to their income.

For scale, Bank of Canada staff analysis published in July 2025 estimated that about 60 per cent of all outstanding mortgages in Canada would renew in 2025 or 2026. This is not a small group having an unusual experience.

When does your lender have to tell you anything?

At least 21 days before the end of your term, and that is the floor rather than the plan.

The Financial Consumer Agency of Canada states that "the lender must provide you with a renewal statement at least 21 days before the end of the existing term". The same rule covers the worse outcome: your lender must also notify you 21 days before the end of your term if they will not renew your mortgage at all.

Three weeks is not enough time to arrange anything. Under the Canadian Mortgage Charter, federally regulated lenders are expected to make proactive contact about renewal options four to six months in advance. FCAC's own advice is to start shopping around a few months before the end of the term.

If you are inside the last month and have not heard anything useful, call. The renewal offer that arrives in the mail is an opening position, not a quote.

Can you move to another lender without passing the stress test again?

On an uninsured mortgage, yes, provided it is a straight switch.

The Office of the Superintendent of Financial Institutions sets a minimum qualifying rate of "the greater of the mortgage contract rate plus 2% or 5.25%". On the same page, OSFI says it does not expect lenders to apply that rate to uninsured straight switches at renewal.

The definition is the whole thing. OSFI describes a straight switch as moving an existing stand alone uninsured mortgage from one federally regulated financial institution to another "with no increases in the remaining contractual mortgage amortization period or the loan amount". That change took effect on 21 November 2024. Add to the balance, or stretch the amortization while you are moving, and it stops being a straight switch and the qualifying rate applies again.

If your mortgage is insured, the Canadian Mortgage Charter sets out the parallel expectation: permitting insured mortgage holders to switch lenders at renewal without requalifying under the insured minimum qualifying rate.

Either way the new lender still has to approve you. FCAC notes that a new lender may use different criteria than your original lender to decide whether you qualify. What has gone is the specific obstacle that used to make shopping around pointless for anyone whose income had not kept pace with rates. We wrote about the qualifying rate in more detail in our guide to how the mortgage stress test works.

What does a longer amortization actually cost?

A great deal of interest, which is why it is a tool rather than a solution.

FCAC's own worked example on its mortgage relief options page takes a mortgage from a 20 year amortization to a 30 year one and shows total interest rising from $173,130 to $276,386. Its renewal page puts it plainly: "Think twice before extending your amortization to lower your payments. The interest costs that you'll need to pay will be higher."

That is not an argument against doing it. A longer amortization that keeps a household in its home through one hard term is a good trade. It is an argument against doing it without knowing the number, and the number is usually six figures. Our affordability calculator will show you what a given payment supports before you commit to a term.

What can you ask for if the payment is not affordable?

Call before you miss one. FCAC's instruction is direct: "If you're experiencing financial difficulties, contact your financial institution as soon as you can."

The relief options FCAC lists include a payment deferral, usually of up to four months; skipping a payment, typically capped at a set number each calendar year; a special payment arrangement that reduces payments for an agreed period; capitalization, which adds late payments to the principal; interest only payments; a blend and extend that folds a new rate into your existing term; and a sale by borrower plan, where the lender allows you to sell at fair market value rather than moving to enforcement.

Separately, FCAC sets out expectations of banks for borrowers at risk of falling behind on a principal residence mortgage. Banks are expected to extend the amortization period, to waive prepayment penalties, to waive internal fees or costs for a limited period when relief starts, and to avoid charging interest on interest for a limited period in cases where relief results in negative amortization. The Canadian Mortgage Charter adds that homeowners at risk should be able to make lump sum payments, or sell a principal residence, without prepayment penalties.

Read that list once more as a borrower rather than as a policy document. Fee waivers and penalty waivers are things you have to ask for, and the asking is easier before a payment is missed than after.

Every measure on the list moves cost into the future. A deferral means you owe more later. Capitalization means a bigger payment after the relief ends. None of them is free, and all of them are cheaper than a default.

Is selling the quick way out?

It is slower than most sellers expect, and it usually settles below the asking price.

The Toronto Regional Real Estate Board reported a GTA average selling price of $1,003,956 in July 2026, down 4.5 per cent year over year, on 5,995 sales against 14,484 new listings. In the condominium apartment segment, homes sold at 97 per cent of asking after 40 days on market.

Those figures describe a market with more choice in it than competition, which changes what selling under pressure looks like. A sale to solve a payment problem needs a timeline, and a timeline is the one thing a household in trouble tends not to have. If selling is genuinely on the table, run it as a plan several months out rather than as a reaction to a renewal letter. Our net proceeds calculator shows what actually lands in your account after costs, and our selling page sets out how we approach pricing a home that has to move.

What should you do first?

1. Find your renewal date and count backwards six months. That is when the conversation starts, not three weeks out.
2. Get a quote from at least one lender who is not your current one, and ask specifically whether it can be written as a straight switch.
3. Work out the payment at the offered rate before you negotiate anything, so you know whether you have an affordability problem or a shopping problem.
4. If the payment does not work, call your lender before the first missed payment and ask what relief measures they offer and what each one costs.
5. Treat a longer amortization as a decision with a price attached, and ask for that price in dollars.

None of this is tax or legal advice, and the rules above are as published by FCAC, OSFI and the Department of Finance at the time of writing. If your situation is complicated, a mortgage broker and an accountant are cheaper than a bad renewal.