# Why are 1-2 year fixed terms emerging as a 2026 renewal strategy?

> In a market where 60% of renewals face payment increases, shorter fixed terms act as a reset window.

Category: Renewal
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/renewal/why-are-1-2-year-fixed-terms-emerging-as-a-2026-renewal-strategy

## Answer
### Strategic Proof

- Market Shift: ~15% increase in 1-2 year term adoption since 2024.
- BoC Context: Bank of Canada policy rate target is 4.45% prime rate as of April 2026
- Risk Mitigation: Breaks the 'cliff' into smaller, manageable decision points.

## Related guide
- https://ratellow.com/guides/short-term-fixed-renewal

## Sources
- BANKOFCANADA — https://www.bankofcanada.ca/2025/07/staff-analytical-note-2025-21/#Introduction
- OSFI-BSIF — https://www.osfi-bsif.gc.ca/en/news/backgrounder-final-capital-adequacy-requirements-guideline-2026