Why Canadian Landlords Are Charging for Things They Never Used To

About 60% of outstanding Canadian mortgages — roughly 1.2 million loans — will renew by the end of 2026, according to the Bank of Canada. Many of those were locked in at 1% to 2% during the pandemic and are now rolling over at 4% to 5%. For a landlord with a $400,000 mortgage, that means an extra $400 to $600 every month. And that’s just the mortgage payment.

Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.

This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.

60%
of Canadian mortgages renew by end of 2026
Bank of Canada

$400–600
extra monthly cost on a $400K mortgage
Bank of Canada

5–12%
annual home insurance premium increase
RentBase

44%
more charged by financial landlords vs. average rent
Better Dwelling

Landlords across Canada are facing a cost crunch they haven’t seen in decades. Mortgage renewals at double the old rate, insurance premiums climbing faster than inflation, and rent increase caps that don’t keep up with expenses — all at once. The result is a growing list of new fees, charges, and rent hikes that tenants are now seeing for the first time. Some of those charges are legal. Many are not. The gap between what landlords need and what tenants can be legally charged is where the trouble starts.

Here’s what you actually need to know.

Mortgage Renewal Shock
Pandemic-era 1–2% fixed rates are rolling over to 4–5%. Landlords with five properties could see their monthly payments jump by thousands of dollars.

Insurance Costs Are Spiking
Climate disasters and rising construction costs have pushed premiums up 5–12% year over year, with Alberta and the Prairies hit hardest.

Many New Fees Are Illegal
Ontario’s Residential Tenancies Act bans most extra charges — admin fees, pet deposits, cleaning fees, and application costs are not allowed.

Financialization Is Changing the Game
Large financial landlords use algorithmic pricing and strategic vacancies to push rents higher, charging 44% more than individual owners.

Four Things to Know Before You Sign Another Lease

What I tend to notice is that most tenants don’t realise how much the financial landscape for landlords has shifted in the past two years. The days when a landlord could absorb a small cost increase are gone. But that doesn’t mean tenants have to accept every new charge that shows up on a lease or rent receipt. Understanding financialization — the process where housing is treated as a financial asset rather than a place to live — helps explain why big corporate landlords behave differently than individual owners. The key is knowing which charges are real and which are simply being tested to see if you’ll pay.

Financialization
The process of turning housing from a human need into a financial asset for investment returns. In Canada, financialized landlords (REITs, private equity firms, large asset managers) now own a growing share of rental housing and use strategies like algorithmic pricing, above-guideline rent increases, and tenant displacement to maximize profit.

Why Landlords Are Suddenly Looking for Extra Revenue

The numbers tell a straightforward story. A landlord who bought a duplex in Hamilton, Ontario in 2020 with a fixed-rate mortgage at 1.8% was generating roughly $650 in positive monthly cash flow by early 2024. By 2026, with that mortgage renewing at 4.5%, insurance up 8%, and the Ontario rent increase guideline capped at 2.1%, the same property was losing $789 per month — a swing of nearly $1,440 every month. That’s not a minor squeeze. That’s a structural shift that forces landlords to find new revenue or sell.

Here’s what the cost breakdown looks like for a typical Ontario landlord with a $400,000 mortgage:

→ Scroll right to see all columns

Source: RentBase cost analysis
Cost Factor 2020–2022 2025–2026 Monthly Impact
Mortgage rate (5-yr fixed) 1–2% 4–5% +$400 to $600
Home insurance (annual) ~$1,200 +5–12% YoY +$5 to $12/month
Rent increase cap (Ontario) 2.5% 2.1% Can’t cover cost gap
National vacancy rate 2.2% (2024) 3.1% (2025) More units sit empty
$1,439 per month swing
A Hamilton duplex that generated +$650 monthly cash flow in 2024 flipped to -$789 by 2026 — a $1,439 loss per month after mortgage renewal, insurance increases, and rent cap limits. That’s the kind of pressure driving landlords to test new fees.

Insurance alone is a growing burden. Canadian home insurance premiums jumped 5% to 12% year over year depending on the province. Alberta saw nearly 10%, Saskatchewan and Manitoba as high as 12%. For a landlord with five properties, that’s an extra $1,500 to $3,000 per year. Meanwhile, residential construction costs are up over 60% from pre-pandemic levels, making every repair claim more expensive. Landlords who used to cover small maintenance costs out of cash flow are now looking for ways to pass those costs along. That’s where the new charges start appearing — and where tenants need to pay attention.

Where Landlords and Tenants Are Getting It Wrong

Illegal fees disguised as standard charges

Ontario’s Residential Tenancies Act, 2006 is clear: additional deposits for damages, cleaning, pets, or security are not allowed. Non-refundable fees for “administration,” “application,” or “processing” are illegal. Pet fees or deposits are not permitted. Mandatory cleaning fees at move-out are not allowed unless the tenant caused damage beyond normal wear. Yet these charges are showing up on leases and rent receipts across the province. Some landlords genuinely don’t know the law. Others are testing whether tenants will push back. The legal charges a landlord can collect are limited to rent, a last month’s rent deposit (or first month if agreed), and a refundable key deposit equal to the replacement cost of the keys. A tenant can file a Form T1 with the Landlord and Tenant Board to get a rebate for any illegal fees paid. The LTB typically schedules hearings within four to six weeks of receiving a complete application.

Renovictions and above-guideline increases

Financialized landlords use a strategy called “value add” — renovate a unit, displace the tenant, and re-rent at a much higher rate. This is the corporate version of a renoviction, and it’s backed by data. In Ontario, analysis of over 4,100 above-guideline rent increase filings found that nearly half of the affected units were owned by financialized landlords. In the Greater Toronto Area, a study of 385,707 eviction filings between 2010 and 2021 found that renters in Black-majority neighbourhoods were nearly twice as likely to receive eviction filings from financialized landlords compared to other visible-minority renter-majority neighbourhoods, and three times as likely compared to white renter-majority neighbourhoods. These aren’t random market forces. They’re systematic strategies that target specific communities.

Assuming the lease is always correct

A lease is a contract, but it’s not automatically legal just because it’s written down. A landlord can include a clause charging a $200 “administration fee” at move-in, but that clause is void under Ontario law. The same goes for “mandatory professional cleaning” at move-out or a “pet deposit” that’s labelled non-refundable. Tenants who sign and pay without questioning these clauses are often out that money permanently. The moment a tenant signs a lease with an illegal charge and pays it, recovering that money requires filing a formal application with the LTB. The better approach is to review the lease for illegal charges before signing, request removal in writing, and keep a copy of all communications. If the landlord refuses, tenants can file a complaint before the money ever changes hands.

How to Tell a Legal Charge From an Illegal One

Every province has its own tenancy laws, but the pattern is similar across most of Canada: the list of charges a landlord can collect is short and specific. Anything outside that list is likely illegal. Here’s a direct comparison based on Ontario’s rules, which are the most detailed in the country:

→ Scroll right to see all columns

Source: Tenant Rights Ontario guide
Charge Type Legal or Illegal What to Watch For
Rent (monthly amount agreed in lease) Legal Must be stated clearly in the lease
Last month’s rent deposit Legal Cannot exceed one month’s rent; must be returned with interest
Refundable key deposit Legal Limited to replacement cost of keys
Administration or application fee Illegal Commonly labelled “processing fee” or “tenant fee”
Pet deposit or pet fee Illegal No form of pet charge is permitted in Ontario
Mandatory move-out cleaning fee Illegal Only chargeable if tenant causes damage beyond normal wear
Security deposit beyond last month’s rent Illegal No additional damage deposits allowed
Guest or visitor access fee Illegal Cannot charge for guests entering the building

Tenants who suspect they’ve been charged an illegal fee should document everything — save the lease, receipts, emails, and any written communication. A tenant can use a video doorbell to record landlord entry times or harassment, which can serve as evidence in a hearing. The next step is to file a Form T1 (for a rebate of money the landlord owes) or Form T2 (for broader tenant rights issues including harassment over illegal charges) with the Landlord and Tenant Board. For tenants who want legal guidance before filing, services like JustAnswer Canada Lawyers can help clarify what applies to their specific situation. The filing fee for a T1 or T2 application ranges from $50 to $201, and the LTB schedules hearings within four to six weeks. In cases of illegal eviction, utility shutoff, or serious habitability issues, tenants can request an urgent hearing that happens within days.

Frequently Asked Questions

Can a landlord charge a fee for parking or storage? ▾
Yes, if the parking or storage is optional and separately agreed in the lease. It cannot be mandatory or bundled into a non-optional fee.
What happens if I pay an illegal fee and then find out it’s illegal?▾
You can file a Form T1 with the LTB to get a rebate. The board can order the landlord to refund the full amount. Keep all receipts and communications.
Can a landlord raise rent by more than the guideline if they’ve done renovations?▾
In Ontario, landlords can apply for an above-guideline rent increase (AGI) for capital improvements. Nearly half of AGI filings are from financialized landlords. Tenants can challenge the application at a hearing.
Is rent control the same across Canada?▾
No. Alberta has no rent control. Ontario caps rent only for pre-November 2018 units. BC caps all units. Nova Scotia’s rent cap expired in early 2025. Each province sets its own rules.
Can a landlord evict me for not paying an illegal fee?▾
No. An illegal fee is not a valid rent charge. A landlord cannot evict for non-payment of a fee that isn’t legally enforceable. If they try, file a T2 application immediately.
What’s the difference between a rent deposit and a security deposit?▾
A rent deposit (last month’s rent) is legal and must be applied to the final month of tenancy. A security deposit for damages or cleaning is illegal in Ontario and most other provinces.

The New Normal for Canadian Renters

The cost pressures on landlords aren’t going away. With 60% of mortgages renewing by the end of 2026 and insurance premiums climbing every year, the financial squeeze will only intensify. What’s changing is how landlords respond to that pressure — and whether tenants know their rights when they do. The provinces that have strong rent control and clear fee rules are seeing more pushback from tenants. The provinces without those protections are seeing more creative charges appear on leases. The long-term question isn’t whether landlords will keep charging for things they never used to. It’s whether the legal framework will catch up to the new financial reality — or whether tenants will have to fight every new charge one Form T1 at a time.

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Sam Willy

I’m Sam Willy, one of the bright minds behind BritWealth.com, where I share insights, stories, and fun ideas about a wide range of topics—finance included, but not limited to it! My journey into the world of writing began with a simple hobby: sharing the things that fascinated me. From quirky facts to deeper dives into personal development, I’ve always been curious about the world around me and love passing that knowledge on.
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