October 20, 2025
As thousands of Calgary homeowners approach their mortgage renewal dates in 2025 and 2026, the question of whether to simply renew or refinance has never been more critical. According to the Bank of Canada, roughly 60% of all Canadian mortgages will renew by the end of 2026, and many of those borrowers will face significantly higher payments due to elevated interest rates. For example, a homeowner with a $450,000 balance at 2.49% who renews at today’s average five-year fixed rate near 5.3% could see their monthly payment rise by more than $600. This reality is forcing many households to rethink their mortgage strategy—especially in Alberta, where home prices have stabilized, but household debt remains among the highest in the country.
Renewing your mortgage typically means staying with your current lender and accepting their offered rate for a new term, often without requalifying under the federal stress test. While convenient, it’s rarely the most cost-effective approach. Refinancing, on the other hand, allows you to shop the market, access better rates, consolidate debt, or adjust your amortization period. The trade-off is that refinancing is treated as a new mortgage application—requiring full requalification, new legal registration, and potential penalties if you’re breaking your term early. However, for borrowers with strong equity positions and stable income, refinancing can unlock significant long-term savings or provide financial breathing room through debt restructuring.
In Calgary’s evolving market, timing matters. Fixed mortgage rates have hovered between 4.8% and 5.4% through much of 2025, but forecasters expect gradual rate cuts as inflation continues to ease. If rates begin trending downward into mid-2026, refinancing could offer more flexibility than locking into a higher-rate renewal today. That said, homeowners should also consider factors like penalty costs, equity levels, and their long-term plans. For instance, someone expecting to sell within two years may prefer a shorter-term renewal to avoid early discharge fees, while others planning to stay put could benefit from a strategic refinance that resets their amortization and locks in future stability.
The best approach is to start evaluating your options six to twelve months before renewal. Obtain a payout statement from your lender, compare rates from multiple institutions, and calculate the total cost difference between renewal and refinance scenarios. A qualified mortgage broker can model each path using your specific numbers—accounting for penalties, savings, and future rate forecasts. By acting early and understanding the math, Calgary homeowners can turn what might feel like a financial setback into an opportunity to reset their mortgage strategy for the next market cycle.
Source: Absolute Mortgage Team