Ottawa Real Estate: The Hidden Risk in 2026 Renewals

There’s a lot of attention right now on whether the Bank of Canada will raise rates by another 0.25% to 0.50%.

But the bigger story is not the rate hike itself. It is who will be impacted next.

A Look Back: The 2020 to 2022 Buyers

In Ottawa, thousands of homeowners purchased between 2020 and early 2022 during a very different market environment.

At the time:

• Interest rates were around 2% to 3%
• Home prices were near peak levels, often between $750,000 to $850,000 or more
• Low borrowing costs allowed buyers to stretch their budgets further

Fast forward to today, and those same homeowners are now approaching mortgage renewal.

A Very Different Reality at Renewal

The market conditions they are renewing into have changed significantly.

Today:

• Interest rates are closer to 5% or higher
• Monthly payments are increasing substantially

For example:

A home purchased around $800,000 in 2022 could see payments rise from approximately $2,870 per month to nearly $3,900 per month.

That is an increase of roughly $1,000 per month.

If rates rise further, the financial pressure only increases.

What This Means for the Ottawa Market

This does not point to a market crash. However, it does signal a shift.

We can expect:

• More listings entering the market, particularly from investors
• Longer time on market for properties
• Increased negotiation opportunities for buyers

Ottawa’s strong base of government employment will likely help prevent widespread distress. However, stability does not mean the market will remain unchanged.

Why the Next 6 to 12 Months Matter

As more homeowners reach their renewal period, the impact will become more visible across the market.

The next 6 to 12 months will be a key window as this wave of renewals unfolds.

Final Thoughts

Whether you are a homeowner, investor, or buyer, this is a critical time to stay informed and make strategic decisions.

The market is not crashing, but it is evolving. Understanding these changes early can make a significant difference in your next move.