Renewal time marks the 'biggest pivot' for many owners as payment increases loom
Canadian households face another year of higher borrowing and protection costs, with mortgage renewals and insurance premiums expected to be key pressure points on budgets.
A new analysis from Rates.ca highlighted five everyday expense categories likely to climb this year, led by mortgage renewals, home and auto insurance, and higher costs for essentials such as food, transportation, and services.
“The biggest pivot for many homeowners this year is happening at renewal,” Victor Tran, mortgage and real estate expert at Rates.ca, said.
“Renewing from historically low rates could translate into materially higher monthly payments. The real strain is being felt by homeowners coming off five-year fixed-rate mortgages, which remain the most common mortgage type in Canada.”
Recent Bank of Canada research showed that borrowers with five-year fixed mortgages renewing in 2025 or 2026 could face average payment increases of around 15%–20% compared with their December 2024 payments.
Roughly 60% of outstanding mortgages are expected to renew by the end of 2026, concentrating that shock over a short window.
Insurance costs keep climbing
Insurance premiums also continue to trend higher. According to Statistics Canada, home and auto insurance rates rose 6.8% and 7.3% year over year in October 2025, a trajectory experts expected to persist.
“Insurance premiums are rising as the overall cost of claims continues to increase,” Daniel Ivans, insurance expert at Rates.ca, said.
“More frequent severe weather, higher repair costs, inflation, tariffs, and geopolitical pressures are all contributing to a higher cost environment that Canadians are facing with their insurance this year.”
Insurers have struggled with mounting catastrophe and repair claims, with Ivans warning that “when claims go up, costs go up.” He encouraged policyholders to “prevent claims, maximize discounts,” and to work with brokers to uncover all available savings.
Inflation in everyday essentials add to the strain
Beyond mortgages and insurance, households also contended with rising food, transport, and service costs. The latest Canada Food Price Report projected grocery bills for a typical family of four to climb by roughly 4%–6% in 2026, adding close to $1,000 to annual spending, while restaurant prices are expected to increase at a similar pace.
Those pressures landed on top of higher transportation costs, including fare hikes in major transit systems and increased car-rental and commuting costs, as well as service-sector price gains linked to persistent labour shortages.
Economist Roslyn Kunin captured the tension facing many households and businesses as a “horrible paradox”: inflation in essentials persisting alongside a still-sluggish economy and ongoing hiring challenges.
Meanwhile, a new TD survey found that 67% of Canadians plan to cut back their spending this year, up from 51% a year earlier, and nearly six in 10 expected to trim monthly budgets by as much as $1,000.
Saving and investing, managing day‑to‑day expenses, paying down debt and covering housing costs all ranked as leading priorities, yet only just over a third of respondents reported having a formal financial plan for 2026.
For mortgage and insurance professionals, that mix meant clients arriving at renewal or policy review with less financial slack and a greater need for advice that combinedrate strategy, risk management, and realistic budgeting.
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