The Bank of Canada kept its policy rate at 2.25% on September 2. That means there is no immediate change for most variable rate borrowers. But for homeowners approaching a mortgage renewal, today’s announcement does not necessarily mean their next payment will stay the same.
Many five year fixed mortgages taken out during the unusually low rate period of 2020 and 2021 are now reaching renewal. These borrowers are moving from rates that were often close to 2% into a very different lending environment.
The Bank of Canada estimates that homeowners with five year fixed mortgages renewing in 2026 could see their payments rise by an average of approximately 20%. The exact change will depend on their remaining balance, amortization and the rate they are offered.
🔑 Variable mortgage rates respond more directly to the Bank of Canada’s policy rate.
🏦 Fixed mortgage rates are influenced largely by government bond yields, which have recently moved higher.
📅 Renewal rates also depend on the lender, mortgage term, remaining balance and amortization.
For homeowners, the takeaway is simple: a rate hold does not guarantee a lower renewal rate. If your mortgage is renewing within the next four to six months, this is a good time to review the numbers, compare options and understand the new payment before accepting your lender’s first offer.
A Renewal Can Change More Than Your Monthly Payment
If your mortgage is renewing soon, it may also affect decisions about staying, renovating or moving. We can help you understand your home’s current value and what your next move could realistically look like in Ottawa’s market. 📞 613 699 7918
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