This year, more than a million Canadian homeowners will have to renew their mortgages. Many of them will have to pay 15% to 20% more than they did during the pandemic.
Newcomers to Canada who want to buy their first home now have to deal with stricter qualification requirements under the federal mortgage stress test.
This complete guide has all the information you need about rising fixed mortgage rates in Canada. It includes current rates from major banks, predictions about renewal shock, and tips on how to keep your household budget safe.
What is going on with fixed mortgage rates in Canada?
In April 2026, fixed mortgage rates in Canada are expected to keep going up after being relatively stable for most of the year.
The main reason for the rise is that Government of Canada bond yields have gone above 3% because of ongoing geopolitical tensions and high energy prices.
High-ratio mortgages have the lowest fixed mortgage rates in Canada as of April 4, 2026. They range from 4.04% to 4.09%. Big Bank rates are around 4.29%.
The Bank of Canada has kept its overnight policy rate at 2.25% since late 2025. This has kept variable mortgage rates stable, but fixed rates change based on what happens in the bond market.
This difference between fixed and variable rates is important for both first-time homebuyers and current homeowners who are getting ready to renew their mortgages.
Why Are Fixed Mortgage Rates Going Up in April 2026?
The Bank of Canada policy rate does not directly affect fixed mortgage rates in Canada.
Instead, the Government of Canada’s bond yields, especially the 5-year bond yield, which is used as a benchmark for 5-year fixed mortgages, set fixed rates.
In 2026, bond yields are going up for a number of reasons.
Tensions between countries and energy prices
The ongoing conflict in the Middle East has made global financial markets unstable and caused energy prices to rise.
As oil prices go up, inflation expectations go up as well. This makes investors want higher yields on bonds to make up for the loss of purchasing power they expect to happen.
In the last few weeks, bond yields have gone above 3%, which is the highest level since mid-2024.
Uncertainty about trade with the US
Canada’s trade is very uncertain right now because of ongoing tariff fights with the United States.
The required six-year CUSMA review in 2026 is a big turning point that could change how the two countries’ economies work together.
This uncertainty makes Canada riskier and pushes longer-term bond yields higher.
Trends in Inflation
The Bank of Canada says that Canadian inflation has gotten better recently, dropping to 1.8% in February 2026.
However, core inflation rates are still a little high, between 2.5% and 2.8%.
Geopolitical tensions have caused energy prices around the world to rise sharply, which will likely cause inflation to rise in the next few months.
This ongoing risk of inflation makes it hard for the Bank of Canada to lower rates and keeps bond yields high.
What Major Banks Think Mortgage Rates Will Be in 2026
The biggest banks in Canada have made their predictions about where interest rates will go from now until 2026 and 2027.
Forecast for 2026 and 2027 for the institution
RBC Economics: The policy rate stays at 2.25%.Rising to 3.25%
The policy rate stays at 2.25% according to TD Economics.Stays at 2.25%
Scotiabank will go up to 3.00% in the second half of 2026.Stays at three percent
BMO Capital MarketsThe policy rate stays at 2.25%.2.4% on average
The policy rate stays at 2.25% for CIBC Capital Markets.Go up to 2.75%
National Bank: Up 0.5% in the fourth quarter of 2026Finish at 2.75%
Most big banks agree that the overnight policy rate will stay at 2.25% for most of 2026.
But Scotiabank and National Bank don’t agree with this and think that rates will go up later this year.
As bond yields stay high or go up, fixed mortgage rates are likely to go up a little bit in 2026.
What You Should Know About the 2026 Mortgage Renewal Shock
More than a million Canadian mortgages will be up for renewal in 2026. This is what financial experts call the “mortgage renewal shock.”
The Bank of Canada says that about 60% of all mortgages in Canada will be renewed in 2025 or 2026.
People who got five-year fixed-rate mortgages during the pandemic years of 2020 and 2021 got rates as low as 1.5% to 2%.
These mortgages are now coming due in a market where fixed rates for five years are around 4% or higher.
Expected Payment Increases by Type of Mortgage
Type of mortgage: Expected change in payment
5-Year Fixed (started in 2021)Rise of 15% to 20%
5-Year Fixed Payment with a Variable AmountRise by up to 40%
Variable Rate, Variable PaymentDrop of 5% to 7%
Short-Term Fixed (starting in 2023)Decrease (lower rate when you renew)
A homeowner who locked in a 2.5% mortgage in 2020 and now renews at 4.0% will have to pay about $320 more each month.
If you have a $400,000 mortgage that goes from 2.04% to 4.5%, your monthly payment will go up by almost $600, or $7,200 more a year.
How Higher Fixed Rates Affect People Who Are New to Canada
When rates are going up, people who are new to Canada have to deal with problems that are different from those that people who have lived here for a while face when buying their first home.
To be successful, you need to know how to qualify for a mortgage, what the stress test requirements are, and what special programs are available for newcomers.
What the Mortgage Stress Test Is
No matter what their immigration status is, all Canadians who want to get a mortgage must pass the federal mortgage stress test.
The stress test says that borrowers must be able to pay back their loans at the higher of the Bank of Canada’s benchmark rate of 5.25% or their contract interest rate plus 2%.
You have to show that you can afford payments at 6.5% if your mortgage rate is 4.5%.
This lowers the most money you can borrow compared to what you could get if you qualified at your actual contract rate.
How Stress Tests Affect Buying Power
Household Income: Max Without Stress Test: Max With Stress Test: $100,000: $450,000: $340,000: $150,000: $675,000: $510,000: $200,000: $900,000: $680,000:
The stress test lowers the maximum mortgage amounts by about 24%, depending on how much money you make and how much debt you have.
In April 2026, fixed vs. variable mortgage rates
One of the most important choices for Canadian homebuyers and renewers is still whether to get a fixed or variable mortgage rate.
Comparison of Current Rates
As of April 2026, the lowest 5-year fixed mortgage rate in Canada is about 4.04% through mortgage brokers and 4.29% at big banks. The lowest 5-year variable rate is about 3.35%.
Variable rates are lower than fixed rates right now, so you can save money right away.
But the Bank of Canada is unlikely to lower rates again in 2026, which means that variable rates won’t be able to save you any more money.
Why Fixed Rates Should Be Used in 2026
A 5-year fixed rate gives you peace of mind when things are very uncertain.
Fixed rates protect borrowers from possible rate hikes in the future over a long period of time.
Monthly payments stay the same, which makes it easier for families with tight budgets to plan their spending.
If variable rates go up, the fixed rate that is locked in becomes more valuable for the rest of the term.
Why Variable Rates Should Be Used in 2026
Right now, variable rates are lower than fixed rates, which means you can save money right away.
The Bank of Canada may lower rates if the economy gets a lot worse, which would save even more money.
Most of the time, variable rate mortgages have lower penalties for paying off the loan early than fixed rate mortgages.
Borrowers who may sell or refinance before the term ends have more options.
Ways to Deal with Rising Mortgage Costs
There are a few things you can do to deal with the effects of rising fixed mortgage rates, whether you’re getting ready to renew your mortgage or buy your first home.
For homeowners who are about to renew
- At least 120 days before your renewal date, start making plans.
- Most lenders offer 120-day rate holds that can keep your rates from going up before you renew.
- Compare offers from several lenders, including mortgage brokers who may be able to get you better rates.
- Think about lengthening your amortisation period to lower your monthly payments. This will, however, raise the total interest you pay.
- Canadians who are renewing their mortgages have been able to lower their monthly payments by extending their amortisation periods, sometimes for more than 25 years.
- If you don’t increase your mortgage balance and stay with your current lender, you might not have to take the stress test when you renew.
For People Buying Their First Home
- If you save up a bigger down payment, you can lower the amount you owe on your mortgage and your monthly payments.
- Think about homes that are below your maximum qualification to keep your finances flexible.
- Get pre-approved to lock in the current rates while you look for a house.
- Take into account all the costs of owning a home, such as taxes, insurance, utilities, and upkeep.
For people who are new to Canada
- Use your credit card wisely to build your Canadian credit history as quickly as you can.
- Keep records of your foreign credit history, such as letters from banks.
- Before you apply for a mortgage, make sure you have a full-time job for at least three months.
- Think about getting a specialised mortgage for newcomers from a big bank.
- Talk to a mortgage broker who knows a lot about helping new homeowners.
The Canadian housing market in 2026
The Canadian Real Estate Association thinks that sales will grow slowly and prices will stay mostly the same in 2026.
Nationally, home sales are expected to rise by 5.1%, reaching about 494,500 transactions.
The average price of a home in the US is expected to go up 2.8% to $698,881.
Expectations for the Regional Market
Region Sales GrowthTrend in Price
British Columbia: 8% more stable to moderate growth
8% rise in OntarioLimited growth
Quebec: moderate rise; prices go up by 7%
Alberta: Small gains, softening
Saskatchewan: A moderate riseMore and more increases
CREA thinks that sales will go up another 3.5% by 2027, and the national average price will go up 2.3% to $714,991.
Important Dates for People Who Borrow Money in 2026
Date Event
April 29, 2026Next announcement about the Bank of Canada’s interest rates
Decision on Bank of Canada rates in June 2026
Q4 2026: The peak renewal period for 2021 originations. 2026: The six-year mandatory review for CUSMA.
The Bank of Canada makes eight planned rate decisions each year, with one every 6 to 8 weeks.
In April 2026, fixed mortgage rates will go up, which will make things harder for both current homeowners who need to renew their mortgages and people who want to buy their first Canadian home.
You can do well in this situation if you know about current interest rate trends, stress test requirements, and the strategies that are available to you.
This year’s mortgage renewal shock will affect more than a million Canadians. To deal with it, you need to plan ahead and make decisions quickly.
Start planning early, look at offers from more than one lender, and think about working with a mortgage professional who knows your specific situation.
