What if Canada's mortgage renewals reset 300 basis points higher?
Canada's 5-year fixed renewal cliff resetting +300bp is a mechanical consumption and credit shock concentrated in CAD assets — short Canadian banks and consumer-discretionary, widen Canadian HY — not primarily a US-rates event, so the modeled US 2y/10y +4bp and front-end-yield kick overstate the cross-border transmission. This is a payment-shock story (rhymes with UK 2023 mortgage reset), best mapped to credit/recession not Fed hawkishness. Roots are too US-policy-centric for a domestic renewal trigger.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Canadian five-year fixed mortgages reset 300bps higher in 2026, forcing payment shock across over-leveraged households. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Recession signal ▲ · Mortgage rates ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.