1 and 2 Year Fixed Mortgage Terms: Smart Renewal Strategies for Canadians in 2026
Locking into a long-term fixed rate feels risky when rate cuts are expected; a 1- or 2-year fixed term lets you benefit from lower rates sooner without the uncertainty of a variable mortgage.
In 2026, 1-year fixed rates are broadly available in the 4.09%–4.79% range and 2-year fixed rates in the 4.19%–4.89% range, offering meaningful savings versus 5-year fixed rates for borrowers who can tolerate a near-term renewal.
Short-term fixed terms are not the right fit for every borrower — those who prioritize payment certainty, plan to sell, or cannot absorb renewal risk should weigh longer terms carefully.
Quebec borrowers considering a lender switch should account for notarial fees, which can range from $800 to $1,500 or more and may reduce or eliminate the financial benefit of switching for smaller mortgage balances.
A 1- or 2-year fixed term can help you avoid locking in at today's elevated rates, giving you flexibility to refinance at lower rates if the Bank of Canada continues cutting in 2026.
Short-term fixed rates in 2026 typically range from 4.09% to 4.79% for 1-year terms and 4.19% to 4.89% for 2-year terms, compared to 4.49%–5.10% for a 5-year fixed — the spread matters over time.
Quebec homeowners should factor in notarial fees when considering a lender switch at renewal, as these costs can offset rate savings depending on your mortgage balance.
Expert Research FAQ
Why are 1-2 year fixed terms emerging as a 2026 renewal strategy?
What are the regulatory implications of the Dec 2024 reforms on short terms?
How do 2026 rental rules impact investment property short-term strategies?
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