Need to Know (And Do) Right Now
A million Canadian homeowners are about to get a crash course in interest rate reality. And if you're a real estate agent who's been waiting for the "right time" to reconnect with past clients, consider this your alarm clock.
Between 2020 and 2021, Canadians locked in five-year fixed mortgages at rates that now seem almost fictional: 1.5% to 3%. Those terms are expiring, and the new normal sits around 4% to 4.09%.
On a $550,000 mortgage (roughly average for many Canadian markets) that rate jump means an extra $550 per month. Annualized, that's $6,500 to $6,600 more per year flowing toward the mortgage instead of savings, vacations, renovations, or that second car payment.
Real estate broker LJ Aguinaga summed it up in a recent interview: "Families are definitely going to feel a pinch."
Why This Isn't 2008
Before the doom-scrollers get too excited, there's a crucial difference between this renewal wave and previous housing scares: the stress test.
Every buyer who qualified for a mortgage during the pandemic era was tested at a rate of 5.25%, regardless of their actual contract rate. That means the vast majority of these homeowners can technically afford their new payments, even if it doesn't feel comfortable.
Aguinaga doesn't expect a wave of distressed sales: "Everybody qualified for these mortgages, even with the new rates. I suspect Canadians are going to have to tighten their belts and adjust what they're spending."
Translation: belt-tightening, not fire sales.
The Amortization Temptation
Here's where it gets interesting for agents who want to add value.
Some homeowners may be tempted to extend their amortizations (stretching from 20 years remaining to 25 or even 40 years) to keep monthly payments manageable. On paper, it works. In practice, it's expensive.
Portfolio manager Michael Zagari warns that extending amortization could cost homeowners an extra $10,000 to $20,000 (or more) in total interest over the life of the loan. That's money that never builds equity.
For agents, this creates a conversation opportunity: helping clients understand that short-term payment relief might compromise their long-term financial position, especially if they're planning to sell or upgrade within the next decade.
What Smart Agents Are Doing Now
The renewal wave isn't a threat to your business, it's an opportunity to demonstrate value. Here's how:
- Reach out early. Don't wait for clients to call you in a panic six months before renewal. Start conversations now about their timeline, their plans, and their options.
- Connect with mortgage professionals. If you don't have a trusted broker in your network, find one. Your clients will need expert guidance on rate shopping, refinancing options, and amortization trade-offs.
- Talk about the stress test. Many homeowners don't realize they were already qualified at higher rates. Reminding them of this can reduce anxiety and help them make rational decisions.
- Position yourself as a long-term advisor. The agents who thrive in uncertain markets are the ones who stay in touch between transactions. This renewal wave is a perfect excuse to reconnect and provide genuine value.
The Bottom Line
The 2026 mortgage renewal wave isn't a crisis; it's a stress test for household budgets and a loyalty test for real estate professionals. Your past clients are about to face real financial decisions, and many won't know where to turn.
Be the agent who reaches out first. Be the one who explains the options. Be the professional who turns a stressful renewal into a relationship that lasts another decade.
The question isn't whether your clients will renew; it's whether they will renew. It's whether they'll remember you when they do.
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