The short version
- Rates doubled since 2021. New five year fixed mortgages averaged about 2.2% in 2021. Today they are about 4.5%.
- Payments rise about 16% to 21%. On a $600,000 mortgage from 2021, that is roughly $400 more a month going variable, or $450 to $545 more going fixed.
- The payment is not the whole story. The jump lands on top of higher grocery, gas and insurance bills. That combination is where households feel the squeeze.
- No flood of listings so far. GTA new listings are down 14.4% from last year, and most owners are absorbing the increase.
- The real risk is 2022 and 2023 buyers. Toronto buyers who stretched near the peak are falling behind most, and their renewals start in 2027.
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The Rate Gap: What Changed in Five Years
In February 2021 the average rate on a new uninsured five year fixed mortgage at Canada’s chartered banks hit 1.94%, its pandemic low in the Bank of Canada’s data. By July 2026 the same rate averaged 4.49%. A borrower who locked in during the pandemic is not renewing into a slightly higher rate. They are renewing into one that is more than twice as high.
2021 Low, New 5 Yr Fixed
1.94%
Uninsured, February 2021
Same Rate, July 2026
4.49%
Uninsured; insured averaged 4.05%
Mortgages Renewing
~60%
Of all Canadian mortgages, in 2025 and 2026
5 Yr Fixed, 2026 Renewal
~+20%
Bank of Canada estimate of the payment rise
Average Rate on New Five Year Fixed Mortgages, 2019 to 2026
Annual average of monthly rates at chartered banks. The shaded years are when today’s renewals were signed.
Uninsured (under 80% loan to value)
Insured (high ratio)
Source: Bank of Canada, rates on new five year and over fixed rate residential mortgages at chartered banks (Valet series V122667780 insured and V122667786 uninsured). Annual figures are our averages of the monthly data; 2026 covers January to July. Monthly low of 1.94% (uninsured) and 1.91% (insured) in February 2021.
Why fixed rates rose even though the Bank of Canada has been cutting. The Bank’s overnight rate is 2.25%, well below its 2023 peak, and has been on hold since October 2025. But five year fixed mortgages are priced off five year Government of Canada bond yields, not the overnight rate. Those yields climbed from 3.35% on September 1 to 3.60% on October 2, 2026, and lenders raised fixed rates with them. That is why a renewal this fall can cost more than one signed in the spring, without the Bank doing anything.
What people are actually renewing into. As of October 6, 2026, the best available rates were about 3.8% for a three year variable, 3.4% for a five year variable, and 4.2% to 4.3% for a three or five year fixed. Most well qualified borrowers renewing this fall will land somewhere between roughly 3.8% and 4.3%, depending on the term and how much rate risk they want to carry.
Dashboard 2 of 3
The Payment Shock, in Dollars
Here is what it looks like on a typical GTA pandemic purchase: a $600,000 mortgage taken in 2021 at 2.18%, over 25 years. The payment was $2,593 a month. At renewal five years later about $504,500 is left to pay, with 20 years to go.
2021 Monthly Payment
$2,593
$600,000 at 2.18%, 25 years
Going Variable, ~3.8%
+$404
$2,997 a month, up about 16%
Going Fixed, ~4.3%
+$545
$3,138 a month, up about 21%
Fixed, Reset to 25 Years
+$155
$2,748 a month, up about 6%
Monthly Payment on a $600,000 2021 Mortgage, Before and After Renewal
Same borrower, same balance of about $504,500 at renewal. Only the rate and the amortization change.
Original 2021 payment
Renewed, 20 years left
Renewed, amortization reset to 25 years
Source: MO Realty Team calculation using standard Canadian semi annual compounding. 2.18% is the 2021 average uninsured five year fixed (Bank of Canada). Renewal rates reflect best available rates on Ratehub, October 6, 2026 (three year variable about 3.84%, five year fixed 4.34%). Variable payments change if the prime rate moves. Illustrative only.
| If you renew… | Monthly payment | Change |
|---|---|---|
| Original 2021 payment at 2.18% | $2,593 | Starting point |
| Variable, about 3.8% | $2,997 | +$404 (+16%) |
| Fixed, about 4.0% | $3,049 | +$456 (+18%) |
| Fixed, about 4.3% | $3,138 | +$545 (+21%) |
| Fixed at 4.3%, reset to 25 years | $2,748 | +$155 (+6%) |
On its own, this is manageable for most. The Bank of Canada expects five year fixed borrowers renewing now to see payments rise about 15% to 20%, in line with our example, and says about half of them could erase the increase by stretching their amortization by five years.
Where the real squeeze comes from: everything else. A $400 to $545 jump lands on top of a cost of living that has kept climbing. Inflation was 3.0% in August, driven by gas and tariffs, and Toronto’s unemployment rate was 6.8%. For a household already stretched by groceries, insurance and childcare, the renewal is often the thing that tips the budget, not the thing that breaks it on its own.
Where the GTA stands out. About 9% of Toronto area borrowers renewing in 2027 could not refinance at today’s prices because they owe too much relative to their home’s value, more than double the 4% national rate (Bank of Canada).
Dashboard 3 of 3
Will Renewals Flood the Market With Listings?
This is the question we hear most. The short answer from the data so far is no, not broadly. Most renewing borrowers are absorbing the increase, and GTA new listings are running below last year, not above it. But stress is real and rising in one specific group, and it is not the group most people assume.
GTA New Listings, Sept
−14.4%
16,500 vs 19,270 a year earlier
Canada, 60+ Days Arrears
0.32%
Share of mortgages, March 2026
Toronto CMA Delinquencies
+45%
Year over year, Q4 2025 (Ontario +35%)
Toronto 2022 to 2023 High Debt Buyers
1.33%
60+ days in arrears, about 13x normal
Share of Mortgages 60 Days or More in Arrears
The national rate is low. The stress is concentrated among Toronto borrowers with high loan to income ratios who bought in 2022 and 2023.
Normal range
Elevated
Source: Bank of Canada, Financial Stability Report 2026 (May 2026), Chart 7, data to March 2026. The Toronto high loan to income 2022 to 2023 group is about 2% of mortgage balances. CMHC Residential Mortgage Industry Report release, May 12, 2026 (Ontario and Toronto CMA delinquency growth, Q4 2025). Equifax Canada Q2 2026 credit trends, August 24, 2026. TRREB Market Watch, September 2026.
Why the 2021 buyers are mostly coping. Five years of income growth, equity built through payments, and a stress test when they bought. More than 90% of borrowers who renewed in the past year did so below their stress test rate (Bank of Canada).
The group to watch bought later. Toronto buyers who stretched in 2022 and 2023, near the peak, are falling behind at about 13 times the normal rate. They are a small group, about 2% of mortgage balances, but many have little equity left, and their renewals start in 2027.
What this means, depending on who you are
Renewing in the next 12 months
Shop it early
Lock a rate up to 120 days ahead and compare at least two lenders.
Bought in 2022 or 2023
Plan a year ahead
Know your home’s value and build a cash buffer before your 2027 renewal.
Buying
Motivated sellers, not a flood
Expect some sharply priced listings, but do not wait for a crash the data is not showing.
Selling
Price to the market
Some competing sellers need to move, so price to recent closings and present well.
What would change our mind: GTA new listings rising year over year while sales keep falling, a sharp rise in power of sale listings, or arrears climbing well above normal. None of these is happening yet.