The $900/Month Nightmare: Why 2026 is the Hardest

If you bought your home in Ontario between 2020 and 2021, you likely secured the lowest interest rates in Canadian history — somewhere between 1.5% and 1.99%.

It felt like a lottery win at the time. But as we enter 2026, those 5-year terms are expiring, and the financial landscape has completely shifted.

Economists call it the “Renewal Cliff.” I call it the “Silent Crisis” because most people are too embarrassed to talk about it until they receive the letter from the bank.

According to data, roughly 60% of all outstanding mortgages are set to renew by the end of 2026. If you are one of them, the generic advice to “cut Netflix” isn’t going to cut it.

As a Mortgage Broker in Ontario, Canada, I am seeing the real numbers on the ground. Here is the hard math on what to expect, and more importantly, the three actual strategies you can use to protect your home.

The “Payment Shock” Math

The issue isn’t just that “rates are higher.” The issue is the massive gap between your old rate and your new one.

In a normal market, rates might drift up by 1%. But in 2026, homeowners are renewing from historic lows (~1.79%) into a “new normal” of 4.5% — 5.5%.

Let’s look at a typical Ontario family who bought a townhome in 2021:

• Mortgage Amount: $600,000

• Old Rate (2021): 1.79% (5-Year Fixed)

• Old Monthly Payment: ~$2,480

The 2026 Renewal Reality:

Even if rates stabilize at 4.5%, your new math looks like this:

• New Rate (2026): 4.5%

• New Monthly Payment: ~$3,350

• The “Shock”: +$870 per month

That is almost $900 in after-tax income disappearing from your budget overnight. For many families in the GTA and Hamilton, this is the difference between staying afloat and falling into debt.

Note: If you have a variable rate with fixed payments, you may be in “Negative Amortization.” At renewal, you won’t just face a higher rate — you may be asked to make a lump sum payment of $10,000+.

The 3 Solutions (That Banks Don’t Always Offer)

If you cannot afford a $900/month increase, do not panic. You have options, but only if you act before you sign the renewal letter.

1. The “Amortization Reset”

Most renewals default to your remaining amortization (e.g., 20 years left). However, we can often refinance your mortgage to reset the amortization back to 30 years.

By spreading the loan over a longer period, we can drastically lower your monthly payment — often bringing it close to what you are paying now. Yes, you pay more interest long-term, but you keep the house.

2. The “Consumer Proposal” Strategy

Sometimes the mortgage isn’t the problem — it’s the Visa bill on top of the mortgage. If you have significant credit card debt, a Consumer Proposal strategy can reduce that unsecured debt by up to 80%.

If we eliminate $800/month in credit card payments, that frees up the cash you need to absorb the mortgage increase.

3. Shop the “B-Side”

Your current bank knows you are stressed, so they may offer you a higher rate (e.g., 5.29%) hoping you are too exhausted to shop around.

Always get a second opinion. A Licensed Mortgage Professional can check “Monoline Lenders” or B-Lenders who often have more flexible debt ratios than the big banks.

The Bottom Line

The worst thing you can do is ignore the mail. The “Renewal Cliff” is real, but it is manageable if we build a plan now, 3–6 months before your maturity date.

?? Need a Second Opinion?

I offer a free “Renewal Shock Assessment” for Ontario homeowners. We will calculate your exact payment increase and look at amortization options to lower your monthly costs.

Book Your Free Renewal Strategy Call Here

Jason Dayal is a Licensed Mortgage Agent (Level 1) with Pineapple Financial.

FSRA Lic #M25001261. Serving Hamilton, GTA and Ontario.

This article is for information only and does not constitute financial advice.