Mortgage Payment Shock Calculator 2026: Prepare for Renewal ($900B at Risk)
WARNING: $900 BILLION in mortgages renewing in 2026 at MUCH higher rates! Payment shock = your mortgage payment increases $500-$1,500/month when you renew. Example: $300K loan at 3% → 6.5% = +$700/month! Who's affected: Anyone with mortgage renewing 2026-2027 (5-year terms from 2021-2022). Solutions: (1) Refinance NOW at 6.5% (lock before renewal), (2) Extend amortization (lower payment), (3) Switch lenders (better rate). Calculate your payment shock + refinance options. Related: When to refinance guide.
⚠️ Payment Shock Example:
$300K Loan at 3%: $1,265/month (old payment)
Renew at 6.5%: $1,896/month (new payment)
SHOCK: +$631/month = +$7,572/year!
5-Year Cost: +$37,860 more in payments
Who's Affected: 26% of mortgages ($900B) renewing 2026
⏰ Prepare NOW! Refinance before renewal to lock lower rate!
Payment Shock Calculator (2026)
📊 Calculate Your Payment Shock:
| Loan Balance | Old Rate (3%) | New Rate (6.5%) | Monthly Shock |
|---|---|---|---|
| $200K | $843/month | $1,264/month | +$421/month |
| $300K | $1,265/month | $1,896/month | +$631/month |
| $400K | $1,686/month | $2,528/month | +$842/month |
| $500K | $2,108/month | $3,160/month | +$1,052/month |
💡 How to Use This Calculator:
- Find your current mortgage balance (check latest statement)
- Find your current rate (likely 2.5%-3.5% if you got mortgage 2020-2022)
- Estimate renewal rate (6.5%-7% in 2026)
- Calculate monthly shock = New Payment - Old Payment
- Multiply by 12 = Annual shock. Multiply by 5 = 5-year cost!
🎯 Calculate Your Exact Payment Shock!
Get personalized refinance options. Lock rates NOW before renewal!
Calculate Payment Shock →Free calculator • Refinance quotes • Payment shock specialists
Why Payment Shock is Happening (2026 Crisis)
📈 The Perfect Storm:
2020-2022: Record Low Rates
Rates: 2.5%-3.5% (pandemic lows)
Volume: $2 trillion in mortgages originated
Terms: Mostly 5-year fixed (renewing 2025-2027)
2026: Rates Still High
Current Rates: 6.5%-7% (double 2021 rates!)
Renewals: $900B mortgages renewing in 2026
Impact: Payments increase $500-$1,500/month
Result: Payment Shock
26% of mortgages affected (CMHC data)
Average shock: +$700/month per household
Total impact: $8.4B/year in extra payments
4 Options to Avoid Payment Shock
✅ Option 1: Refinance NOW (Lock Lower Rate)
Strategy: Refinance 6-12 months BEFORE renewal at current 6.5% rate. Lock it in for 5 years.
Example:
Current: $300K at 3% = $1,265/month (renewing Dec 2026)
Refinance NOW: Lock 6.5% = $1,896/month
Wait Until Renewal: Might be 7% = $1,996/month
Savings: $100/month = $6,000 over 5 years
💡 Option 2: Extend Amortization (Lower Payment)
Strategy: Extend from 25 years → 30 years. Spreads payments over longer period = lower monthly.
Example:
25-Year Amortization: $300K at 6.5% = $1,896/month
30-Year Amortization: $300K at 6.5% = $1,896/month
Savings: $232/month = $13,920 over 5 years
Trade-off: Pay $45K more interest over life of loan
🔄 Option 3: Switch Lenders (Better Rate)
Strategy: Shop 5+ lenders at renewal. Don't auto-renew with current lender!
Example:
Current Lender Offer: 6.8% renewal
Competitor Offer: 6.3% (0.5% lower!)
Savings: $95/month = $5,700 over 5 years
Tip: Use current lender's offer to negotiate with competitors
💰 Option 4: Make Lump Sum Payment (Reduce Balance)
Strategy: Pay down principal before renewal. Lower balance = lower payment.
Example:
Before: $300K at 6.5% = $1,896/month
Pay $50K Lump Sum: $250K at 6.5% = $1,580/month
Savings: $316/month = $18,960 over 5 years
Tip: Use savings, bonus, inheritance, HELOC
⏰ Don't Wait! Refinance Before Renewal!
Lock 6.5% NOW before rates hit 7%+. Compare 5+ lenders FREE!
Get Refinance Quotes →Free quotes • No obligation • Payment shock specialists
Renewal Timeline: When to Act
12 Months Before Renewal: Start Preparing
Actions: Check renewal date, calculate payment shock, review budget, start saving for potential increase.
6-9 Months Before: Shop Lenders
Actions: Get quotes from 5+ lenders, compare rates, consider refinancing early to lock lower rate.
3-6 Months Before: Make Decision
Actions: Choose best option (refinance now, extend amortization, switch lenders, lump sum payment).
120 Days Before: Lock It In
Actions: Most lenders allow 120-day rate holds. Lock your rate NOW to protect from increases.
Renewal Day: Close the Deal 🎉
Actions: Sign renewal documents. Your new rate is locked for 5 years. Payment shock minimized!
Common Mistakes to Avoid
❌ Mistake #1: Auto-Renewing with Current Lender
Why it's bad: Current lender knows you're lazy = offers worst rate (6.8% vs 6.3% competitors).
✅ FIX: Shop 5+ lenders. Use current lender's offer to negotiate.
❌ Mistake #2: Waiting Until Last Minute
Why it's bad: Rates might spike. No time to shop. Forced to accept whatever rate offered.
✅ FIX: Start 6-12 months early. Lock rate 120 days before renewal.
❌ Mistake #3: Not Considering Refinance Early
Why it's bad: Rates might be lower NOW than at renewal. Miss opportunity to lock lower rate.
✅ FIX: If rates are 6.5% now and trending up, refinance early!
❌ Mistake #4: Ignoring Payment Shock
Why it's bad: Suddenly can't afford $700/month increase = default risk, stress, financial crisis.
✅ FIX: Calculate shock NOW. Adjust budget. Consider options (extend amortization, lump sum).