Key takeaways
- Roughly 60% of outstanding Canadian mortgages renew by the end of 2026, and about 60% of those will renew at a higher rate than they started with.
- A $900,000 Oakville mortgage taken at 1.99% in 2021 renews at about $4,649 a month at today's five-year fixed rates, up roughly $842, or 22%.
- You no longer need to pass the stress test to move an uninsured mortgage to a new lender at renewal, as long as the balance and amortization stay the same.
- Lenders will typically hold a renewal or switch rate for 90 to 120 days. Start four to six months before maturity, not when the letter arrives.
- The Bank of Canada held its rate at 2.25% on September 2, its seventh straight hold. Competitive five-year fixed rates sit around 4.24% and variables around prime minus 1%.
In this article
- Why 2026 is the year of the renewal
- What an Oakville renewal looks like in dollars
- Where rates stand right now
- The rule change most Oakville homeowners have not heard about
- Renewal, switch or refinance: know which one you are doing
- The timeline that saves you money
- How to negotiate the letter
- Use the renewal to fix the rest of the balance sheet
- The short version
A few months before your mortgage term ends, an envelope or an email arrives from your lender. It has a rate, a few term options, and a place to sign. Most people sign it. It takes two minutes and it feels responsible.
It is also, year after year, the most expensive two minutes in Canadian homeownership. Renewal offers are not written to be your best available rate. They are written to be good enough that you do not shop. On a typical Ontario mortgage the gap between a renewal letter and a properly negotiated rate is a few thousand dollars over the term. On an Oakville mortgage, where balances of $700,000 to $1.2 million are ordinary, it is often five figures.
This is the renewal playbook I walk Oakville homeowners through in 2026, a year when an unusual number of mortgages are coming up at once.
Why 2026 is the year of the renewal
The Bank of Canada estimates that about 60% of outstanding mortgages renew by the end of 2026, and that about 60% of those will face a higher rate than the one they started with. The reason is simple arithmetic: an enormous number of five-year fixed mortgages were signed in 2020 and 2021 at rates between roughly 1.7% and 2.3%, and they are maturing into a market where five-year fixed rates are in the low fours.
Oakville feels this more than most places because homes were bought at 2021 prices with 2021 mortgages. A family that bought a River Oaks detached home for $1.4 million in mid-2021 with 20% down has a mortgage that started around $1.12 million. That mortgage is renewing now.
What an Oakville renewal looks like in dollars
Take a $900,000 mortgage set up in September 2021 at 1.99% on a 25-year amortization. The monthly payment was about $3,807. After five years the balance is about $753,800 with 20 years of amortization left.
Three things jump out. First, the increase is significant but survivable for most Oakville households, and it is far smaller than the doubling some headlines predicted in 2023, because rates have come down since then. Second, the difference between an unshopped renewal letter and a competitive rate is about $200 a month, or $12,000 over a five-year term, on this one mortgage. Third, the payment can be brought back down by resetting the amortization, but that is a refinance, not a renewal, and it comes with its own rules, which I cover below. To run your own balance, the mortgage payment calculator uses the same Canadian compounding as your lender.
Where rates stand right now
On September 2, 2026 the Bank of Canada held its policy rate at 2.25% for the seventh consecutive announcement, citing trade uncertainty and inflation that is still running around 3% on the headline measure even as core inflation sits near 2%. Prime at the major banks is 4.45%. The next decision is October 28, and the market consensus going into the fall is for no moves for the rest of the year.
In practical terms, as of early September 2026:
- Competitive five-year fixed rates are around 4.24%, with shorter fixed terms priced close to that.
- Five-year variable rates are around prime minus 1%, or about 3.45%.
- Renewal letters from big banks are commonly a quarter to half a point above the rates a new client would be offered for the same term.
Rates change weekly and every file is different, so treat these as a snapshot and check the rates page for the current picture. The point is not the exact number. The point is that you should know the number a new client would get before you respond to the letter.
The rule change most Oakville homeowners have not heard about
For years the stress test trapped homeowners with their existing lender. If you wanted to move a mortgage to a competitor at renewal, the new lender had to qualify you at your contract rate plus 2%, which for many families with large Oakville mortgages meant they could not switch, and their bank knew it.
That is over. Under OSFI's current guidance, federally regulated lenders are not required to apply the minimum qualifying rate when a borrower switches an uninsured mortgage to a new lender at renewal, provided the loan amount and the amortization do not increase. Insured mortgages can be switched without a stress test as well. Your current lender never stress-tested you at renewal, so the playing field is now level.
For a household carrying a $1 million mortgage, that is the difference between needing to qualify at about 6.24% and qualifying at the actual rate. It puts the negotiating power back where it belongs.
Renewal, switch or refinance: know which one you are doing
Renewal is staying with your lender and picking a new term and rate. No re-qualification, no paperwork beyond a signature, and no negotiation unless you start one.
Switch (also called a transfer) is moving the same mortgage to a new lender at maturity. No stress test on a straight switch, most lenders cover the appraisal and legal costs, and you typically pay a discharge fee to the old lender of a few hundred dollars. This is where the savings usually are.
Refinance is changing the mortgage itself: a bigger balance, a longer amortization, a home equity line of credit added, or a consolidation of other debts. It requires full qualification at the stress-test rate, an appraisal, and legal fees of roughly $1,000 to $1,500. It can still be the right move, especially at Oakville equity levels, but you should choose it deliberately rather than stumble into it.
The timeline that saves you money
- Six months out: Note your maturity date and find out your current balance and amortization. If you have a variable-rate mortgage, check whether your payment has been keeping up with the rate.
- Four months out: Talk to a broker. Rates can typically be held for 90 to 120 days, so this is the earliest a competitive rate can be locked while you keep watching the market.
- Three months out: Your lender's early-renewal offers start arriving. Compare them against the held rate, not against nothing.
- 21 days out: Federally regulated lenders must send a renewal statement at least 21 days before maturity. Do not let this be the first time you look at it.
- Maturity: If you do nothing, many lenders roll you into a short open or closed term at a poor rate. Never let a mortgage renew by default.
How to negotiate the letter
- Get a competing offer in writing first. A vague "I can get better elsewhere" does nothing. A held rate from another lender does.
- Ask for the new-client rate. Every lender has one. Ask the retention team, not the branch, and ask specifically what a new client would be offered for the same term today.
- Pick the term on purpose. A five-year fixed is not the default answer in 2026. A three-year fixed, a variable at prime minus 1% or a hybrid can all make sense depending on your plans. If you expect to sell or move up within a few years, penalty math matters more than the rate. I run the numbers in fixed vs. variable in Oakville.
- Check prepayment privileges and the penalty formula. Big-bank fixed-rate penalties are calculated on posted rates and can be brutal at Oakville balances. A slightly higher rate with a fair penalty formula can be the cheaper mortgage.
- Consider an early renewal or blend-and-extend if rates drop. Some lenders will let you lock a new term before maturity, blending your current rate with the new one. It is worth modelling, not assuming.
Use the renewal to fix the rest of the balance sheet
Renewal is the one time you can restructure without paying a penalty. For Oakville homeowners that often means:
- Consolidating a line of credit or car loan into the mortgage at a lower rate, which is a refinance but can still cut total monthly outlay sharply.
- Setting up a home equity line of credit alongside the mortgage for a renovation on a 1980s Glen Abbey or River Oaks home, so you are not financing it on a credit card later.
- Adding a co-borrower or removing one after a separation or an inheritance.
- Shortening the amortization if the payment increase is manageable and you want to be mortgage-free sooner.
Each of these has trade-offs, and some of them turn a switch into a refinance. The right sequence depends on your balance, your equity and what the next five years look like for your family.
The short version
Do not sign the letter. Find out the number a new client would pay, hold a competitive rate early, decide whether you are renewing, switching or refinancing, and pick the term on purpose. On an Oakville-sized mortgage, an hour of work in the spring is worth thousands of dollars by the fall.