If you bought a home or refinanced during the height of the pandemic, you likely locked in historically low fixed mortgage rates some dipping well under 2%. Fast forward five years, and the final wave of those ultra-low rate terms is coming up for renewal.

A recent national report highlighted on COVID-era borrowers expecting higher mortgage rates reveals that nearly 40% of homeowners expect a bump in borrowing costs, with many reporting heightened anxiety about their upcoming mortgage renewal rate increase.

If your 5-year fixed term is maturing soon, you might be asking: How much will my mortgage payment increase at renewal? Should I switch lenders to find the best mortgage renewal rates? How can I protect my household budget?

Below, we break down what is driving these rate changes and actionable strategies to help you navigate your renewal with confidence.

Why Pandemic-Era Borrowers Are Facing Payment Increases

During 2020 and 2021, emergency rate cuts brought central bank policy rates down to record lows. This created an era of unprecedented borrowing power.

While market rates have pulled back from their recent peaks, today’s average borrowing costs remain above those pandemic bottom rates. As a result, homeowners facing a mortgage renewal in 2026 are adjusting to a new economic reality:

• The Rate Gap: Moving from an ultra-low rate to current market rates can add hundreds of dollars to your monthly mortgage payment.
• Financial Strain: Reports indicate that 76% of borrowers expecting higher payments say it will place additional pressure on their overall family finances.
• Lifestyle Adjustments: To absorb higher borrowing costs, many homeowners are scaling back on travel, delaying home renovations, and trimming discretionary spending.

The silver lining? The vast majority of pandemic-era buyers were qualified using the mortgage stress test. This means your finances were verified to handle higher interest rates even if adjusting to the new numbers requires some short-term budgeting tweaks.

4 Smart Strategies to Handle Your Upcoming Mortgage Renewal

You don’t have to simply sign the auto-renewal letter sent by your bank. Use these proactive steps 120 days before your mortgage maturity date:

1. Start Shopping Early (Don’t Auto-Renew)

Lender renewal letters rarely offer the best mortgage renewal rates available. Working with an independent mortgage broker allows you to compare competitive offers across multiple lenders, ensuring you do not leave money on the table.

2. Extend Your Amortization to Lower Payments

If higher monthly payments threaten your cash flow, you can extend mortgage amortization to lower payments. Re-amortizing your remaining balance back to 25 or 30 years lowers your mandatory monthly outlay, offering immediate breathing room for household expenses.

3. Compare Fixed vs. Variable Mortgage Rates

Deciding between a fixed vs variable mortgage rate depends on your risk tolerance:

• Fixed Rates: Offer complete payment predictability, making it easier to budget over a 3-year or 5-year term.
• Variable Rates: Can be advantageous if you anticipate further central bank rate cuts down the road, though payments can fluctuate.

4. Consolidate High-Interest Debt

If you accumulated credit card balances or personal loans, refinancing at renewal allows you to roll high-interest debt into your lower-rate mortgage. This simplifies your obligations into a single, manageable monthly payment.

How to Prepare for Your Mortgage Renewal Today

Step	Action Item	Timeline
1. Assessment	Calculate your remaining balance and target renewal date.	6 Months Out
2. Rate Check	Track current mortgage rates and consult a broker.	4 Months Out
3. Strategy	Evaluate fixed vs. variable options and budget impacts.	3 Months Out
4. Finalize	Lock in your rate hold and sign your new mortgage agreement.	1-2 Months Out

Ready to Find the Best Mortgage Rate?

Rising rates don’t have to mean financial distress. With the right planning and expert guidance, you can secure a term that fits your long-term financial goals.

Facing an upcoming mortgage renewal? Contact our expert mortgage team today for a free rate review and personalized strategy.