Homeowners in London, Exeter and surrounding towns who locked in ultra-low mortgage rates in 2021 are now looking ahead to a very different reality. Mortgage renewals in 2026 are shaping up to be a financial turning point for many — not just because payments are rising but because the way people build equity is shifting.

If you're thinking about downsizing, relocating to a smaller community or simply trying to plan ahead, understanding what to expect can give you a serious advantage. Here's what you need to know.

How much will your mortgage payment increase?

The biggest concern for most homeowners is obvious — higher monthly payments. If you locked in a fixed rate in 2021, you were likely paying somewhere between 1.5% and 2.5%. By 2026, even if rates cool slightly, renewal offers will likely come in between 4.5% and 5.5%.

For a $400,000 mortgage, that could mean an increase of $700 or more per month. In small-town communities like Thorndale or Komoka where affordability used to be a given, that kind of shift can put real pressure on household budgets. The sticker shock isn’t just about dollars — it’s about peace of mind.

Why equity builds slower after renewal

Many homeowners are surprised to learn that a higher interest rate doesn’t just mean higher payments — it also changes how much of your payment goes toward the principal. That means your loan balance shrinks slower and your equity growth slows down — even though you've already been paying your mortgage for years.

This can be especially frustrating for families who thought they'd be closer to paying off their home by now. For those nearing retirement or considering a move, it may feel like taking a step backward. That’s why many homeowners in Lucan and St. Marys are rethinking their timelines and exploring new options before their renewal kicks in.

Should you move before your mortgage renews?

It depends on your long-term goals but timing matters more than ever. We’ve worked with clients in Exeter and London who sold before their renewal and used the equity they’d built to downsize comfortably. Others waited too long and had to adjust their expectations after seeing the new numbers.

If you’ve been thinking about relocating to a smaller town, moving closer to family or simply trading space for lifestyle, your renewal date could be a strategic opportunity. Selling before your new rate takes effect might preserve more of your equity and give you more freedom to choose your next step.

What is the market doing in London and nearby towns?

The London Ontario housing market has seen steady if cautious growth in 2025. Inventory is tighter in areas like Komoka and Lucan where demand remains strong for family-friendly homes and slower-paced living. Sellers who price strategically and prepare early are still attracting serious buyers — especially downsizers and Toronto-area families looking for affordability.

In small towns, timing the market is less about waiting for the “perfect” price and more about understanding your leverage — especially when a mortgage renewal is on the horizon. If you’re unsure whether to move now or later, a clear plan based on your financial picture is the best place to start.

How to prepare now — even if you’re not moving yet

You don’t have to wait until your lender contacts you about your renewal. Start the conversation early. Review your current balance, interest rate and what a new rate would do to your monthly budget. If your renewal is coming up in 2026, now is the time to explore all your options — including selling, porting your mortgage or adjusting your loan term.

We’re seeing more clients in Thorndale and St. Marys ask these questions ahead of time and that clarity makes a huge difference. A proactive strategy gives you choices, reduces stress and helps you protect the equity you’ve worked so hard to build.

The bottom line

Mortgage renewals in 2026 are more than just a financial formality — they’re a turning point. For many in London and surrounding small towns, it’s a chance to reset, rethink and move forward on their own terms.

If you're planning a move or simply want to understand your best options, we’re here to guide you through it — with over 30 years of real local experience.

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