Renewing a Plex Mortgage Signed in 2021: The 2026 Shock, in Numbers

Five-year terms signed in 2021, at the historic bottom for rates, are maturing through 2026. For a plex owner, that is the moment the arithmetic of the file changes all at once. The price backdrop is covered in our analysis of the $880,000 Montreal-area plex. Here, we price the shock and the ways to absorb it.

The math, on a typical file

Take a plex financed with a $600,000 loan taken in 2021 at 2.00% on a 25-year amortization.

• 2021-2026 payment: about $2,539 in principal and interest
• Balance at maturity, after 5 years: about $502,639
• Renewed at 4.09% over the remaining 20 years: about $3,057 per month
• Difference: roughly $518 more per month, close to $6,200 a year

One important caveat: the 4.09% quoted in Montreal on July 23, 2026 is a market floor aimed at insured residential files. An income property held as an investment generally finances above it. At 4.59% over the remaining 20 years, the same mortgage would cost about $3,193 per month, roughly $653 more than in 2021. That is the gap to carry in your operating budget, not the headline rate.

The re-amortization lever, and its price

Renewal brings the remaining amortization down to 20 years, which amplifies the increase: part of the payment jump comes from the shorter runway, not just the rate. Hence the often-overlooked option of stretching the balance back over 25 years. On $502,639 at 4.09% over 25 years, the payment falls to about $2,666, only $127 more than in 2021. The shock nearly disappears.

The trade-off is real and should be taken with eyes open: five more years of payments, principal repaid more slowly and a materially larger total interest bill. The option exists only on an uninsured loan and remains at the lender's discretion. It makes sense to protect cash flow on a building mid-repositioning, far less as a permanent fix.

Three levers before maturity

Lock a rate early. Most lenders let you reserve a rate up to 120 days before maturity, with no obligation to take it if something better appears. In a market where fixed rates move with bond yields rather than with central bank announcements, that is a free option with no reason to skip.

Shop, every time. The renewal offer mailed to you is rarely your lender's best. On a $500,000 balance, 0.25 point is worth about $65 a month, close to $3,900 over five years. Transferring to another lender at maturity carries no prepayment penalty, only administrative fees that the new lender often absorbs.

Prepare the file like a new application. Current leases, documented rental income, building financials, maintenance history. A clean file widens the pool of lenders willing to quote, and it is competition among them that lowers your rate, not negotiation with a single one.

Appreciation does not pay the instalment

The natural reflex is to take comfort in the building's value: the median Montreal-area plex reached $880,000 in June 2026, up about 6% year over year, and a building bought in 2021 is generally worth more than at purchase. True, but that value settles no monthly payment. It converts into cash in only two ways: a refinancing, which raises debt service further, or a sale.

The question to settle before maturity is therefore simple: at the new rate, under your actual financing conditions, does the building still generate positive cash flow after mortgage, taxes, insurance, maintenance and vacancy? If yes, renewal is an adjustment. If no, it is better to handle it now, through re-amortization, a capital injection or a portfolio review, than after six months of negative cash flow.