If you received your Bank of Canada rate hold 2026 news alongside your mortgage renewal letter, you’re not alone. What I’m seeing with clients across Ontario is a mix of relief and confusion about what this January decision actually means for their mortgage payments and renewal options.
As an FSRA-licensed mortgage agent (License #M25001564) with Pineapple Mortgages, serving Milton and the GTA, I’ve been fielding dozens of calls from homeowners trying to decode how this rate hold impacts their specific situation. The reality is that while the Bank of Canada held rates steady at 2.25% heading into January 2026, your mortgage renewal story is far from simple.
Here’s what you need to know about navigating your mortgage renewal in this unique rate environment, plus the strategic moves that could save you thousands over your next term.
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Key Takeaway
The Bank of Canada’s rate hold at 2.25% doesn’t automatically mean your mortgage renewal rate will stay the same. Lender pricing, bond markets, and your personal financial situation all play crucial roles in determining your actual renewal options. Fixed rates follow bond yields — not the overnight rate.
What the January 2026 Rate Hold Really Means
The Bank of Canada held the overnight rate at 2.25% in December 2025, following nine consecutive rate cuts that brought us down from a peak of 5% in mid-2024. Most economists expect this hold to continue through 2026, with the next announcement scheduled for January 28, 2026.
What I’m explaining to clients in Milton and Oakville is that fixed mortgage rates are primarily influenced by Government of Canada bond yields, not the overnight rate. This means your five-year fixed renewal rate could actually be higher or lower than what you’re expecting, regardless of this rate hold. Bond yields are currently sitting around 2.8%, and that’s what’s driving fixed rate pricing.
Current Variable Rates
Prime-based variable rates from major lenders (Prime at 4.45%)
Fixed Rate Range
Five-year fixed rates available through broker networks in Ontario
Renewal Savings
Average rate improvement clients achieve by shopping their renewal vs. bank offers
One thing I always tell clients: the rate hold creates a temporary stability window for variable rates, but it doesn’t guarantee future direction. The Bank of Canada’s messaging suggests they’re data-dependent, meaning employment numbers, inflation trends, and particularly the upcoming USMCA trade negotiations will drive their next moves.
Ontario Mortgage Renewal Reality Check
In my experience working with homeowners across the GTA, the biggest shock comes when they compare their renewal letter to current market rates. Many clients who locked into ultra-low rates between 2020-2022 are facing payment increases of $500-800 monthly, even with rates now significantly lower than their 2023-2024 peaks.
Here’s a real scenario I’m seeing frequently: A Burlington family with a $450,000 mortgage renewing from 1.79% is looking at rates around 3.89% for a five-year fixed term through a broker. That translates to roughly $475 additional monthly payment. Still significant — but far better than the $800+ increases we were quoting a year ago.
Important
Your bank’s renewal offer is typically 0.25% to 0.50% higher than their best available rates. Banks are offering around 4.2-4.5% while brokers can often find 3.84-3.99% for the same profile. Never accept the first renewal letter without shopping around.
What sets this renewal cycle apart is the stress test implications if you’re switching lenders. If you’re refinancing or adding to your mortgage, you’ll need to qualify at the higher of 5.25% or your contract rate plus 2%. At current rates around 3.84%, that means qualifying at 5.84%. The good news: straight switches at maturity — where you’re just moving your mortgage without increasing it — no longer require stress testing as of November 2024.
The CMHC data shows approximately 1.15 million Canadians will renew their mortgages in 2026. For those coming off pandemic-era fixed rates, payment increases averaging around 20% are expected. That’s the reality — but it’s also why shopping your renewal matters more than ever.
Fixed vs Variable Rates After the Rate Hold
The January 2026 rate environment creates an interesting dynamic between fixed and variable mortgage options. For the first time in three years, variable rates have dropped below fixed rates, making them more attractive to borrowers comfortable with some uncertainty.
Variable rates currently sit in the 3.35% to 3.95% range, depending on your lender relationship and down payment. With the Bank of Canada expected to hold at 2.25% through most of 2026, these rates offer predictability that we haven’t seen in years. Prime rate is at 4.45%, and most competitive variable products are priced at Prime minus 0.50% to Prime minus 1.10%.
Fixed rates, however, continue to fluctuate based on bond market conditions. The lowest five-year fixed sits near 3.84% for insured mortgages, with uninsured (conventional) mortgages slightly higher. I’ve seen five-year fixed rates move 0.15% in a single week during January 2026, completely independent of the Bank of Canada decision. This is why timing your rate hold strategy becomes crucial when shopping your renewal.
Good to Know
Many lenders offer rate holds up to 120 days, allowing you to secure today’s fixed rate while maintaining flexibility to switch to variable if conditions improve before your renewal date. The current spread between best variable (3.35%) and best fixed (3.84%) is about 49 basis points — that gap may widen if bond yields stay elevated.
One strategy I’m recommending to clients with renewals in Q2 2026 is securing a fixed rate hold now while monitoring Bank of Canada signals for any shifts. This approach protects against rate increases while preserving options if the economic outlook changes — particularly around the USMCA trade negotiations coming in July.
Your Mortgage Renewal Strategy for 2026
The Bank of Canada rate hold 2026 creates a unique opportunity window for strategic mortgage planning. What I’m advising clients is to treat this stability period as their chance to optimize their mortgage structure, not just accept whatever their current lender offers.
First, start your renewal process 90-120 days early. This gives you time to explore options with my network of 56+ lenders, including credit unions and monoline lenders that consistently beat big bank pricing. I recently helped a Mississauga client save 0.40% by switching from their bank to a credit union — that’s roughly $1,400 annually on a $350,000 mortgage.
Second, consider your prepayment penalty situation if you’re thinking about switching lenders early. With variable rate penalties typically calculated as three months’ interest, some clients benefit from breaking their current mortgage to access better fixed rates. On a $400,000 variable mortgage, that penalty might run $3,000-4,000 — worth calculating against potential long-term savings.
Third, evaluate whether porting your mortgage makes sense if you’re planning to move. The stable rate environment means your existing rate might be worth preserving, even if it requires navigating the porting process.
Finally, use our renewal calculator to model different scenarios. Understanding your payment implications across various rate and term combinations helps you make informed decisions rather than reactive ones.
Areas We Serve in Ontario Region
Milton: As one of Canada’s fastest-growing cities, Milton attracts young families seeking affordable alternatives to Toronto prices. I work extensively with first-time buyers here navigating competitive offer situations and mortgage renewals on tight budgets. The January 2026 rate stability particularly benefits Milton homeowners who purchased during the 2021-2022 peak with variable rate mortgages — they’ve already absorbed the rate hikes and are now seeing relief.
Oakville: Oakville’s established neighbourhoods feature higher-value properties requiring jumbo mortgage solutions and sophisticated renewal strategies. My clients here often benefit from credit union relationships and monoline lender options that provide more competitive pricing than traditional bank renewals. The stable rate environment allows for strategic mortgage restructuring opportunities.
Burlington: Burlington homeowners frequently require specialized lending solutions due to the mix of older homes needing renovation financing and new developments with unique mortgage requirements. I’ve developed strong relationships with lenders who understand Burlington’s diverse housing stock and can provide flexible renewal terms that work with renovation and improvement plans.
Mississauga: As Ontario’s third-largest city, Mississauga presents diverse mortgage needs from downtown condo renewals to suburban family homes. My broker network excels at finding competitive rates for the area’s many self-employed professionals and newcomers establishing credit history. The rate hold creates opportunities for credit union partnerships that often beat big bank pricing by 0.25-0.40%.
Brampton: Brampton’s mix of new construction and established neighbourhoods creates varied mortgage needs. I specialize in helping self-employed borrowers — contractors, small business owners, gig economy workers — who get declined by banks but have strong cash flow. There are lenders who understand non-traditional income. You just need someone who knows where to look.
Why Ontario Clients Choose Zuzart Mortgages
As an FSRA-licensed mortgage agent (M25001564) with Pineapple Mortgages (Brokerage License ON 12830), I bring a straightforward approach to mortgage planning that goes beyond simply finding the lowest rate. My access to 56+ lenders including banks, credit unions, and alternative lenders means I can structure solutions that work for your specific situation — not just what one institution offers.
What sets my practice apart is that I tell it like it is. If your bank’s renewal offer is garbage, I’ll tell you. If your credit needs work before we can get you the best rate, I’ll tell you that too. You deserve straight answers, not a sales pitch. I’ve been a Milton resident since 2014, so I understand both the community dynamics that affect property values and the lending nuances that can make or break your approval.
Recent client success includes helping a Burlington family avoid a $380 monthly payment increase by switching from their bank’s renewal offer to a credit union solution, and structuring a self-employed contractor’s approval after three bank declines — all because I found a lender who actually looks at bank deposits instead of just NOA income.
My services cost you nothing — lenders pay my fee when the mortgage closes. Every consultation starts with understanding your goals, timeline, and financial picture, then matching you with lenders whose criteria and pricing align with your needs. No pressure, no games.
How does the Bank of Canada rate hold at 2.25% affect my mortgage renewal timing?
The rate hold creates a stability window for variable rates, but your renewal timing should be driven by your specific mortgage maturity date and current rate situation. If you’re renewing from a low rate (under 3%), start shopping 90-120 days early regardless of the rate hold, as you’ll face payment increases. However, if you’re currently in a higher variable rate, the hold means your payments stay predictable while you explore options. Most economists expect the Bank to hold at 2.25% through 2026, so don’t delay your renewal process assuming rates will drop further — use this stable period to secure the best available terms.
What’s the difference between my bank’s renewal offer and broker rates in January 2026?
Bank renewal offers typically include a 0.25% to 0.50% markup above their best available rates, treating renewals as captive business. Right now, I’m seeing bank renewal letters at 4.29-4.49% while the same banks offer 3.99-4.19% to new customers through broker channels. Through my network, I can often find rates in the 3.84-3.99% range. This gap exists because banks assume most customers won’t shop their renewal. On a $400,000 mortgage, that 0.40% difference saves you roughly $1,400 per year — over $7,000 across a five-year term.
Should I choose fixed or variable rates given the current rate hold environment?
The January 2026 rate hold makes variable rates more predictable in the short term, and for the first time in three years, variable rates (around 3.35-3.45%) are lower than fixed rates (around 3.84-3.99%). If you can handle some payment uncertainty and believe rates will stay stable or decrease, variable offers an immediate savings advantage. However, if budget certainty is crucial or you’re already stretched, fixed rates provide payment predictability. The current spread of about 0.49% favours variable — but that assumes the Bank of Canada doesn’t raise rates, which becomes more possible if inflation persists or trade negotiations go sideways.
Can I break my current mortgage early to take advantage of lower rates?
Breaking your mortgage early depends on your penalty calculation versus potential savings. Variable rate penalties are typically three months’ interest — roughly $2,500-4,000 on a $400,000 mortgage at current rates. Fixed rate penalties use the higher of three months’ interest or Interest Rate Differential (IRD), which can be significantly larger. If you’re currently paying 5%+ on a variable rate, breaking to access current rates around 3.5-4% might make financial sense. However, you need to factor in legal fees ($500-1,000) and potential appraisal costs. I always run detailed penalty calculations and savings projections before recommending this path.
How do I qualify for mortgage renewal if my income has changed since my original approval?
Good news: mortgage renewals with your existing lender typically don’t require income re-verification unless you’re increasing your mortgage amount. If you want to switch lenders for better rates, you’ll need to meet current qualification standards. The stress test requires qualifying at the higher of 5.25% or your contract rate plus 2%. At current rates around 3.84%, that means qualifying at 5.84%. However, straight switches at maturity — where you’re just moving your mortgage without changes — are now exempt from stress testing as of November 2024. Reduced income might limit your ability to refinance, but won’t prevent a simple renewal or switch. As a broker, I work with lenders who handle various income situations, including self-employed and non-traditional income sources that banks often struggle with.
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