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.
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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.
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.
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:
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| 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 |
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:
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| 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? ▾
What happens if I pay an illegal fee and then find out it’s illegal?▾
Can a landlord raise rent by more than the guideline if they’ve done renovations?▾
Is rent control the same across Canada?▾
Can a landlord evict me for not paying an illegal fee?▾
What’s the difference between a rent deposit and a security deposit?▾
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.
