If you’ve been on the fence about fixed versus variable, the latest data from Canada Mortgage and Housing Corporation might help you make up your mind — and you’re not alone in weighing that decision.

According to CMHC’s most recent Residential Mortgage Industry Report (released May 12, 2026), variable-rate mortgages are now the single most popular mortgage choice in Canada, accounting for 42% of extended mortgages at chartered banks as of February 2026. Meanwhile, only 11% of borrowers are opting for the traditional 5-year fixed term. That’s a dramatic shift from where we were just a few years ago.

As a mortgage broker in the GTA with over 12 years of experience and access to 50+ lenders, I want to break down what this data means for you — whether you’re renewing, buying, or just keeping an eye on the market.

Why Canadians Are Choosing Variable Rates Again

The shift isn’t random. Variable mortgage rates fell below fixed rates in late 2025 for the first time since 2022, making them more financially attractive for borrowers unwilling to pay a premium for certainty. Add to that the Bank of Canada’s current rate hold at 2.25% — and mounting signals that a rate cut is more likely than a hike — and you can see why many buyers and renewers are choosing the flexibility of variable.

As CMHC’s report explains, “many mortgage holders are reluctant to commit to a 5-year fixed term,” citing continued uncertainty around the economic and rate outlook. Between the Middle East conflict pushing energy prices higher, softening core inflation, and ongoing trade uncertainty with the U.S., that caution is understandable.

And the inflation data backs it up: Statistics Canada’s April 2026 CPI report showed headline inflation at 2.8% — higher than March’s 2.4%, mostly due to a 28.6% year-over-year spike in gasoline prices. But here’s what matters to the Bank of Canada: core inflation measures actually fell to 2.05% — the lowest since January 2021. That means underlying price pressures are cooling, even as gas prices make the headline number look scarier.

The message from multiple economists is consistent: the Bank of Canada can afford to be patient. TD economists have stated that rate cuts are the more likely next move if the Bank moves at all. That’s good news for variable-rate holders and those considering entering the market.

The Renewal Cliff Is Behind Us — But Toronto Still Has Pockets of Stress

One of the most significant findings in the CMHC report is that the dreaded “renewal wave” — the surge of homeowners forced to renew mortgages at much higher rates than they originally locked in at — has likely peaked. The number of mortgages up for renewal in 2026 is expected to be 13% lower than in 2025, easing the pressure that’s weighed on the market for the past two years.

Rates have also improved considerably. Average mortgage rates declined from roughly 4.8% in January 2025 to approximately 4.2% in January 2026, reducing the payment shock for renewing homeowners.

That’s the good news. But there’s a caveat for GTA homeowners.

CMHC’s data shows that the national mortgage delinquency rate (90+ days) rose to 0.24% in Q4 2025, up from 0.21% a year prior. On a national basis, this remains low by historical standards. However, Toronto saw mortgage arrears climb 45% year-over-year, one of the sharpest increases in the country. Ontario’s overall delinquency rate rose 35%.

As CMHC Deputy Chief Economist Aled ab Iorwerth put it: “pockets of significant stress still exist beneath the surface, particularly in areas like Toronto and Vancouver where arrears have grown the most.”

For GTA homeowners carrying high mortgage balances relative to their income — or those who purchased near the 2022 peak — this is a reminder that the market isn’t uniformly recovered. If you’re struggling with renewal payments or your financial picture has changed, reaching out to a broker before renewal can unlock options you might not know about.

New Rules Have Changed the Game for First-Time Buyers in Toronto, Mississauga, and Brampton

For first-time buyers, the federal mortgage rule changes that rolled out in late 2024 are having a real impact.

The CMHC data confirms this: in Q4 2025, 54% of mortgages extended to first-time buyers by chartered banks were insured — up significantly from the mid-40% range seen before the rule changes took effect.

Here’s what changed:

• 30-year amortizations are now available for all first-time buyers and anyone purchasing a newly built home (previously capped at 25 years), which reduces monthly payments and makes qualifying easier.
• The maximum home price eligible for insured mortgages rose from $1 million to $1.5 million, a critical change in a market like the GTA where average detached home prices regularly exceed $1 million.

These changes have meaningfully improved buying power for first-time buyers in Toronto, Mississauga, and Brampton, where entry-level townhomes and condos can push past that old $1 million threshold. If you’ve been sitting on the sidelines thinking you couldn’t qualify, it’s worth revisiting that assumption.

The Stress Test at Renewal: A Major Win for GTA Mortgage Switchers

If you’re renewing an uninsured mortgage and considering switching lenders, here’s something important: OSFI removed the stress test requirement for uninsured borrowers switching lenders at renewal in late 2024. The result? Uninsured mortgage switches jumped 34% between the second half of 2024 and the second half of 2025.

This is a game-changer. Previously, even if your existing lender was offering you a poor rate at renewal, the stress test could prevent you from qualifying at a competing lender offering better terms. That hurdle is now gone for qualifying borrowers.

As a broker with access to 50+ lenders, I regularly find clients saving hundreds of dollars per month by switching lenders at renewal. If your renewal is coming up in the next 6–12 months, don’t just accept your bank’s offer — shop around.

What This All Means for GTA Buyers and Homeowners Right Now

Here’s a practical summary of where things stand heading into summer 2026:

If you’re renewing: The worst of the rate shock is likely behind you. With rates now around 4.2% and variable products falling below fixed, explore all your options — including switching lenders, which is now easier than ever.

If you’re buying for the first time: New federal rules (30-year amortizations, $1.5M insured limit) have expanded what’s possible. Variable rates are at a competitive discount to fixed. This may be a better entry window than it looks.

If you’re already in a variable mortgage: Core inflation is cooling, the Bank of Canada is signalling patience, and economists are calling cuts as the more likely next move. Staying variable or locking in a short-term fixed may both be reasonable strategies right now — depending on your circumstances.

If you’re stressed about your mortgage payments: Toronto arrears are rising. If you’re feeling the squeeze, a broker consultation now — before you miss a payment — gives you the most options.

Residential mortgage debt in Canada has surpassed $2.4 trillion, growing at 4.8% annually. The market is active, and the policy environment is more buyer-friendly than it’s been in years. But the GTA remains a high-stakes, high-cost market where the right mortgage structure makes a real difference.

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Ready to figure out what this means for your specific situation?

Whether you’re renewing, buying your first home, or wondering if variable is right for you, I’d love to help you navigate it.

Contact KSD Mortgages for a free consultation:
📞 647-802-3738
✉️ application@ksdmortgages.com
📍 409 Matheson Blvd E, Mississauga, ON L4Z 1R5

Sources: CMHC Residential Mortgage Industry Report (May 12, 2026) via Canadian Mortgage Trends; Statistics Canada CPI April 2026 data via Canadian Mortgage Trends (May 19, 2026)