March 2022 was the worst possible month to buy a home in Canada. Not because anyone knew that at the time. It just turned out that way.

The MLS Home Price Index composite benchmark hit $841,300 that month, the highest it has ever been. Bidding wars were routine. Conditions were waived. Buyers were terrified of being priced out permanently, and that fear was rational, because prices had been climbing so fast for so long that waiting felt like a losing strategy.

Then the Bank of Canada started hiking. Nine times between March 2022 and July 2023, the overnight rate moved from 0.25% to 5.0%. Home prices fell sharply, then stabilized, then drifted lower still. As of February 2026, the MLS HPI benchmark sits at $661,300, still 21% below where it was four years ago. True North Mortgage's analysis puts the timeline for recovery plainly: peak prices are not expected to return until 2029.

That leaves a specific cohort of Canadians in a situation that does not get discussed nearly enough. The people who bought in early 2022, at or near peak prices, with mortgages that are now coming up for renewal. They stretched to get in. They got in at the top. And now they are being asked to renew into a rate environment that, while improved, is nothing like what they borrowed at.

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The Equity Picture

Start with what the price decline has done to net worth on paper.

A buyer who purchased a benchmark home in March 2022 for $841,300 with a 20% down payment put in $168,260 and took on a mortgage of $673,040. At a 5-year fixed rate of around 2.5% over a 25-year amortization, their monthly principal and interest payment was approximately $3,010.

Four years later, that same benchmark property is worth around $661,300 nationally. The outstanding mortgage balance, after four years of payments at 2.5%, has come down to approximately $620,000 through normal amortization. That leaves the homeowner with roughly $41,000 in equity on a property they originally put $168,000 into. Their net equity position has collapsed from $168,000 to $41,000, a loss on paper of more than $127,000.

In markets that fell harder than the national average, the situation is more severe. The Real Estate Institute of Canada documented price declines of 15 to 20% in several regions from the 2022 peak, with the steepest corrections concentrated in Ontario markets outside Toronto. Hamilton, Barrie, and the outer GTA saw some of the sharpest drops. In those markets, buyers who put 10% or 15% down in early 2022 may have already crossed into negative equity territory, where the outstanding mortgage balance exceeds the current market value of the property.

In BC and the Okanagan, the correction has been less severe than in Ontario, but still real. CMHC's February 2026 Housing Market Outlook confirmed that resale markets in Vancouver and Victoria remained historically weak through 2025, with prices sitting below their 2022 highs. Kelowna saw its own correction as vacancy rates spiked and the speculative premium that had built up during the pandemic migration wave partially unwound.

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The Renewal Math

Equity erosion is a paper loss, painful but not necessarily actionable. The renewal is where the pain becomes a monthly cash flow problem.

The 2022 cohort who took five-year fixed mortgages are renewing now, in 2026 and 2027. The rates they are renewing into are meaningfully better than the 2023 peak, when five-year fixed rates briefly touched 5.5% and above. But they are not even close to what this cohort originally locked in.

A $500,000 mortgage at 2% had a monthly payment of approximately $2,118. At a renewal rate of 4.2%, that same mortgage renews at approximately $2,700 per month, a jump of roughly $580 or 27%. That is not a marginal adjustment. For a household that budgeted around the original payment, $580 more every month is the difference between managing and not managing.

The borrowers who were on variable rates in 2022 have already lived through most of this pain. They watched their payment climb in real time as the Bank of Canada hiked, then saw partial relief as rates came back down to 2.25% through nine cuts between 2024 and late 2025. For variable-rate holders, the crisis largely played out between 2022 and 2024. The fixed-rate cohort is dealing with it now.

The Real Estate Institute of Canada noted that mortgage renewals in 2025 resulted in payment increases of 200 to 300 basis points for many households, translating to hundreds of dollars in added monthly costs. Distress sales remained limited, which is genuinely good news. The stress test, introduced in 2016 and expanded in 2018, required borrowers to qualify at a rate 2% above their contract rate. Buyers who got in at 2.5% had to prove they could handle 4.5%. That buffer absorbed a lot of the shock that might otherwise have triggered forced selling.

But not defaulting is not the same as being fine. A 2026 sentiment survey by True North Mortgage found that 36% of mortgage holders described their payments as challenging, with 36% cutting vacations, 31% skipping home repairs, and 27% pulling back on retirement savings. The system held. The households inside it are squeezed.

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What the Options Actually Are

For members of the 2022 cohort coming up on renewal, the picture is uncomfortable but not hopeless. A few things worth knowing.

First, the removal of the stress test for insured mortgage holders switching lenders at renewal, which came into effect in late 2024, matters. Previously, renewing borrowers who wanted to shop around for a better rate had to requalify under the stress test at the new lender. That created a lock-in effect that gave incumbent lenders pricing power. Under the new rules, insured mortgage holders can switch lenders at renewal without retesting. That is real competition, and it means the renewal rate a borrower's existing bank offers is no longer the only option.

Second, amortization extension at renewal is available and increasingly used. A borrower who originally took a 25-year amortization in 2022 has roughly 21 years remaining. They can ask to re-extend to 25 or even 30 years at renewal, which lowers the monthly payment significantly. The trade-off is more total interest paid over the life of the mortgage, but for households whose cash flow is under pressure, the breathing room can be essential.

Third, for homeowners with meaningfully negative equity who cannot refinance through a conventional lender, private lending has expanded significantly in Canada. FSRA data shows 65,233 private mortgages worth $32 billion in Ontario alone, representing 15.8% of the market. Private lending is expensive. Rates run well above conventional mortgages. But it can bridge a period of difficulty while equity recovers or the household's financial situation improves.

Fourth, and most practically: the Financial Consumer Agency of Canada updated its guidance in 2025 requiring federally regulated lenders to proactively offer hardship relief options to borrowers in difficulty. Extended amortizations, skip-a-payment provisions, and payment restructuring are all available before the situation reaches arrears. The time to access those conversations is before a missed payment, not after one.

The 2022 buyer cohort is not a cautionary tale about greed or recklessness. Most of them were ordinary people trying to get into housing before the door closed, using the financing tools available to them, stress-tested by lenders, buying in markets that every professional said would keep climbing. The market turned, and they caught the turn. What matters now is understanding where they actually stand and what levers are available. The equity is down. The payments are up. The road back to the numbers they planned around is probably 2029 at the earliest. But the system built around them is holding, and the options for navigating it are real.