Mortgage Renewal Mistakes Canadians Should Avoid in 2026

Mortgage renewal is one of the most important financial decisions Canadian homeowners will make in 2026. With interest rates stabilizing but still higher than historic lows, a poorly planned renewal can cost thousands in unnecessary interest. Understanding the most common mortgage renewal mistakes—and how to avoid them—can help you protect your finances.

Mistake #1: Automatically Renewing With Your Current Lender

One of the biggest mistakes Canadians make is accepting their lender’s first renewal offer without comparison. Renewal rates are often not the most competitive, and lenders rely on convenience to retain borrowers.

Always compare:

• Interest rates

• Mortgage terms

• Prepayment privileges

• Penalty structures

Mistake #2: Waiting Until the Last Minute

Leaving renewal decisions until maturity limits your negotiating power. Starting late may force you to accept unfavorable terms simply to avoid penalties or rushed decisions.

Begin reviewing options 6 to 12 months before renewal.

Mistake #3: Focusing Only on the Interest Rate

A low rate doesn’t always mean a better mortgage. Many borrowers overlook:

• High break penalties

• Limited prepayment options

• Lack of portability

Total cost and flexibility matter just as much as the rate itself.

Mistake #4: Ignoring Fixed vs Variable Strategy

Choosing between fixed and variable mortgages without considering risk tolerance or market conditions can be costly. In 2026, both options have merit depending on your financial stability and outlook.

A short-term or blended approach may provide balance.

Mistake #5: Not Reviewing Amortization Options

Failing to reassess amortization length can result in higher monthly payments or unnecessary interest costs. Adjusting amortization at renewal can improve cash flow or accelerate mortgage payoff.

Mistake #6: Overlooking Penalties and Fees

Switching lenders may involve appraisal, legal, or discharge fees. However, many lenders offer incentives to cover these costs. Not reviewing these details can lead to unexpected expenses.

Mistake #7: Skipping Professional Advice

Mortgage renewals involve more than paperwork. Without expert guidance, borrowers often miss opportunities to:

• Negotiate better terms

• Reduce interest costs

• Align their mortgage with long-term goals

Final Thoughts

Avoiding these mortgage renewal mistakes in 2026 can save Canadian homeowners significant money and stress. By planning early, comparing lenders, and focusing on overall mortgage strategy—not just rates—you can make smarter, more confident renewal decisions.