There’s a wave moving through the Canadian housing market, and if you bought or refinanced your Kelowna home in 2020 or 2021, you’re likely in it. It has a dramatic name, the “renewal cliff”, but the situation is manageable if you understand it and act early.
What the renewal cliff is
During the pandemic, mortgage rates fell to historic lows, and a huge number of Canadians locked five-year fixed terms at rates near 2%. Those terms are now maturing. According to the Bank of Canada, roughly 60% of all outstanding mortgages renew in 2025 or 2026, and many will renew at rates meaningfully higher than what borrowers originally locked in.
How big is the payment jump?
Households renewing a five-year fixed mortgage in 2025 or 2026 face an average payment increase of roughly 15% to 20% compared with late 2024. That works out to about $5,100 more per year, or just over $425 a month, for a typical affected household. Borrowers on variable rates may actually see payments ease as rates come down; the steepest climb hits those who locked low fixed rates in 2020 to 2021.
What this means for Kelowna specifically
Kelowna’s home prices climbed sharply through the low-rate years, which means local mortgage balances are large, and a 15 to 20% payment increase on a large balance is a real monthly number. The upside? A larger balance also means the savings from shopping for a better rate are larger in absolute dollars.
Four moves to soften the hit
- Know your maturity date and start 90 to 120 days out. Acting early gets you a rate hold and time to shop properly.
- Don’t auto-renew. The offer your bank mails out is frequently above market.
- Re-examine your amortization. Extending it at renewal can lower the monthly payment enough to absorb the shock.
- Run your real number. Don’t catastrophize from a headline; calculate your actual change.
Plan beats panic
The homeowners who get hurt are the ones who wait for the letter and sign it. The ones who come out fine plan 90 to 120 days ahead and shop the market. See your options for a mortgage renewal in Kelowna, or book a free review with me at 250-859-2100. I’m happy to run your real renewal number with you in a few minutes.
To see where you’d land, put your balance and current rate into the renewal calculator and compare your bank’s letter against the switch math.
Breaking mid-term instead of waiting for maturity? Price the exit first in the penalty calculator; the posted-rate method can triple the cost.
Related guides: Mortgage renewal vs. refinance · Switch lenders with no penalty · Kelowna mortgage rates: fixed vs variable
Related reading: the 12-step BC mortgage renewal checklist
Sources and method
The rules and figures on this page are checked against primary sources: Bank of Canada (policy rate), OSFI (mortgage underwriting and the stress test). Rates come from the live lender sheet Ash lends from, and carry their own as-of date. Spot an error? Email [email protected] and it gets fixed.
Frequently asked questions
What is the 2026 renewal cliff?
The wave of pandemic-era mortgages, roughly 60% of outstanding balances by the end of 2026, renewing out of sub-2% rates into today’s market. It’s why renewal strategy suddenly matters to people who never thought about it.
How much will my payment actually rise?
From 1.9% to about 4.24% on a $500,000 balance, payments climb several hundred dollars a month depending on remaining amortization. The renewal calculator turns your real numbers in seconds.
What can I do about it?
Start 120 days early, hold a rate, and make your incumbent compete. Extending amortization at renewal, which is a refinance move, trades total interest for monthly breathing room. Signing the letter untouched is the one option with no upside.