Is It A Good Time To Renew Your Mortgage?

In late October 2026, a rate hold limits the risk of further increases: the five-year bond yield climbed from about 3.0% to 3.1% in June to 3.57% on October 27, prime rose to 4.70%, and the Bank of Canada said another hike may be needed. Waiting is cheaper only if rates fall, and nobody on this board can promise that.

That is a statement about risk, not a prediction. A rate hold does not commit you to a lender, and the next Bank of Canada decision is December 9. The sections below compare three paths on a single balance so you can see what each one risks and what each one buys.

What Has Changed Since The Summer

Three things moved. First, bond yields. The five-year Government of Canada benchmark yield, which lenders use to price fixed rates, was about 3.0% to 3.1% in June 2026, 3.16% on July 21, 3.33% on August 31, 3.63% on September 10, 3.69% on September 29, then drifted to 3.50% on October 22 and 3.57% on October 27. Fixed rates price off that yield plus a lender spread. Banks raised advertised fixed rates by about 5 to 20 basis points on various terms in October, and National Bank added 5 to 10 basis points late in the month.

Second, prime. On October 28 the Bank of Canada raised its overnight target by 25 basis points to 2.50%, the first hike since July 2023. RBC, TD, BMO, Scotiabank and CIBC raised prime from 4.45% to 4.70%, effective October 29, 2026. The October 28 policy rate guide covers the decision, and any variable quote written before that date was written against the old prime.

Third, the direction. The Bank said a further increase may be needed and that it will proceed carefully. After the decision, BMO expects another 25 basis point hike in January 2027, according to the Financial Post. Desjardins expects one more hike with timing that depends on data, and CIBC sees one more as likely and not above 2.75%, according to Reuters. Those are bank forecasts. None is a promise, and the next scheduled decision is December 9, 2026.

Three Paths Compared

All payments below are for $400,000 with 20 years left, using Canadian semi-annual compounding. The rates are real rows from the board, not a forecast.

The variable row needs care. It was written against 4.45% prime. With prime now at 4.70% and the same discount, it becomes 3.83%, which on the same balance is $2,381.93 a month, against $2,330.87 at 3.58%. The discount stays; the rate moves 0.25. Even after that move it is lower than any of the fixed examples, and the risk is that it can climb with each hike.

How A Rate Hold Works

Many lenders let you renew or hold a rate about 120 days before maturity, and the window varies by lender. A hold usually fixes the rate you will get at renewal. Whether it can drop to a lower rate if the lender's rate falls before the date varies, and it is something to ask. A pre-approval for a purchase works in a similar way with a rate hold of commonly 90 to 120 days, which the mortgage pre-approval guide describes.

The hold is not a commitment to stay. With a federally regulated lender, the renewal statement must arrive at least 21 days before the term ends, and until you sign it you can still compare. A borrower with a hold from one lender and a written quote from another has two numbers to work with. That is usually a stronger position than a single letter.

What Waiting Can Cost

If you do nothing until the letter arrives, the rate will be the lender's offer on that day. One illustration from the board in late October, across different terms: BMO's 4.79% five-year letter against the 4.44% three-year rows reported at BMO and RBC, a gap of 0.35 points. On $400,000, 4.79% costs $2,583.34 a month and 4.44% costs $2,508.94, which is $74.40 apart. If fixed rates rise another 25 basis points before your date, the same balance at 5.04% costs $2,637.15, which is $53.81 more than the letter's rate.

The wave of renewals adds a reason to start early. The Bank of Canada estimated in July 2025 that about 60% of mortgages renew in 2025 or 2026, and the May 2026 Financial Stability Report said the last cohort of pandemic-era five-year fixed-payment mortgages, about 12% of those outstanding, renews over the 12 months to mid-2027 with payment increases of about 15% on average. Those figures predate the October hike. Lenders are not short of renewals to process, and a borrower with a written competing offer has more to talk about than one without.

When Waiting Makes Sense

Waiting is reasonable in a few situations. If your term ends within two or three weeks, there is little left to hold. If you want a variable rate and are comfortable with a payment that moves, floating costs nothing in rate-lock terms, and the variable examples on the board are the lowest ones. And if you think rates will fall, waiting benefits you if that happens, but some bank forecasts put a further hike ahead, not a cut. Choosing a shorter fixed term, such as the three-year rows around 4.44%, is another way to keep the decision open. Read fixed or variable after a rate hike before deciding which product suits the payment you can carry.

Run The Numbers On Your Own Balance

The mortgage renewal calculator shows the payment jump from your old rate to the letter and to a shopped rate. The mortgage renewal rates page lists reported letters from five banks and what a switch needs, and the renewal timing guide explains when lenders open the window. If the term ends in 2027, the same logic applies with a longer clock.

What To Ask A Broker This Week

Three specific things are worth pricing. Ask for a rate hold on your maturity date and how long it lasts. Ask for the best written three-year and five-year fixed on your insured status, and the variable discount against the new 4.70% prime. And ask what would happen to the hold if rates dropped before the date. You can request cheaper rates and give a licensed mortgage broker your maturity date and current rate, so the quotes come back in the same shape as your letter. The choice between the three paths is yours, and the numbers in writing make it easier to make.

Questions

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