December 2025 Update

Your 2026 Mortgage Outlook: What Canadians Need to Prepare for a Year of Opportunity

A Canadian homeowner reviewing their 2026 mortgage outlook and financial plan at a winter home office

2025 is wrapping up, and for many Canadians, it's been a long, expensive, unpredictable year.

But here's the good news: the 2026 mortgage outlook is shaping up to be one of the most opportunity-filled periods we've had in a while.

And this is true for homeowners, buyers, and anyone renewing a mortgage.

Rates are lower, 1-2 more cuts are expected, and the shifting market is giving Canadians the chance to reset, rebuild, and rethink their strategies. Whether you're entering a renewal year, considering a refinance, or planning a purchase, now is the time to prepare.

This 2026 Mortgage Playbook will walk you through what's coming, what to expect, and what you can do right now to get ahead.

Understanding the 2026 Market: What the Outlook Shows

The big picture is simple:

  • Rates are expected to come down at least a bit more in 2026
  • Fixed rates and variable rates will behave differently, but overall they're stable
  • Renewals will be one of the biggest financial events of the year for many households (record numbers)
  • Home equity remains one of the strongest financial tools Canadians have

Economic conditions are stabilizing, inflation remains close to target, and bond yields (which impact fixed mortgage rates) have been trending lower. This creates a more forgiving environment for homeowners and new buyers.

Bottom line: The 2026 mortgage outlook suggests a year where Canadians can finally make proactive, strategic moves again rather than reacting to rising rates.

(RE/MAX envisions a pretty healthy housing market next year)

Fixed vs Variable: Which Makes More Sense in 2026?

This will be one of the most important decisions Canadians make this year. And honestly? There's no "perfect" answer. It really depends on your goals, your timeline, and your comfort level.

Comparison of fixed vs variable mortgage rates in Canada with charts and financial documents on a desk

Here's the quick breakdown:

Fixed Rates

Fixed rates offer stability. Your payment stays the same for the entire term, which can be comforting, especially after the volatility of the past few years (and with rates now close to their lows).

But fixed rates also come with higher penalties if you need to break early.

Fixed can make sense if you:

  • Want predictability
  • Don't expect to move or refinance early
  • Prefer the safety of consistent payments

Variable Rates

Variable rates move with your lender's prime rate. When rates drop, you benefit. Now that we're near the bottom of the rate drops, a variable rate isn't as appetizing (unless you get a good one).

Variable can make sense if you:

  • Want to take advantage of falling rates
  • Care about flexibility
  • Want lower break penalties
  • Are comfortable with some movement

Just being honest: The best choice isn't about timing the market, it's about what fits your life.

How to Prepare for a 2026 Renewal

2026 is shaping up to be a massive renewal year. If your mortgage comes due in 2026, your renewal will likely be one of the biggest financial moments of your year.

Here's what to do:

Start Early (6–12 months ahead)

Most Canadians wait until they receive their renewal letter. That's too late.

Starting early opens the door to better rates, better terms, and more negotiation power.

Don't sign the first offer

Your lender's first offer is almost never their best one. You have options, so use them.

Consider your goals

  • Do you want lower payments?
  • Do you want to access equity?
  • Do you plan to move?
  • Do you want to shorten or lengthen your amortization?

Your renewal is the perfect time to re-shape your entire mortgage strategy.

Compare fixed vs variable again

The right choice at renewal might not be the same one from five years ago.

Markets change. Your life changes. Your mortgage should change with you.

Why Home Equity Will Be a Key Advantage in 2026

If you're a homeowner, your equity is one of your most powerful financial tools.

Homeowners reviewing their home equity growth and mortgage strategy for 2026 in a bright living room

Here's why equity matters so much going into 2026:

1. Equity builds your wealth

Rates help your monthly budget… but equity builds your net worth.

When home values rise, your wealth rises (even while you're relaxing and enjoying the holidays).

2. Equity gives you options

A strong equity position means you can:

  • Refinance
  • Consolidate high-interest debt
  • Renovate
  • Invest
  • Purchase a second property
  • Reduce financial stress overnight

3. Equity protects your future

Markets change. Life changes.

Higher equity gives you a cushion when things shift unexpectedly.

4. Rates move, equity stays.

Rates fluctuate daily. But once you've gained equity, it's yours to leverage.

Mortgage Planning for Homeowners: What to Do Before 2026 Arrives

If you want to get ahead, here's where to start:

Do a mortgage check-up

Once a year, minimum. No better time than the start of 2026.

Rates, equity, debt load, renewal dates: it all changes over time. A check-up gives you clarity.

Review your debts

Credit cards and lines of credit hit hard in 2025 for many Canadians. Rolling them into a lower-interest mortgage can free up significant cash flow.

Check your credit

Your credit score influences your rates & lender options. Even a small bump can save thousands over the term.

Decide your 2026 goals

Buying? Refinancing? Renewing? Improving cash flow?

Knowing your goals early changes everything.

Ask questions early

Waiting never helps. Planning always does.

What Buyers Should Expect in 2026

If you're planning to buy this year, the 2026 mortgage outlook gives you a few advantages:

Lower rates improve affordability

Pre-approvals help you shop with confidence

The First Home Savings Account (FHSA) and RRSP contributions are major tools

Spring and summer markets are expected to be competitive

The earlier you prepare, the better your results will be.

The Bottom Line: 2026 Will Reward the Prepared

Mortgage professional meeting with a homeowner to plan their 2026 mortgage strategy and financial goals

2026 isn't about waiting for the "perfect moment." It's about making smart moves, early moves, and informed moves.

Whether you're renewing, refinancing, planning to buy, or simply wanting to improve cash flow, the opportunities are real (but you need a plan to take advantage of them).

And that's where I can help.

Ready to Plan Your 2026 Mortgage Strategy?

If you want a personalized breakdown of your 2026 mortgage strategy, send me a message. I'll walk you through everything in simple terms so you can go into the new year confident and informed.

Contact Us Today Call (204) 205-0147
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