Renewing a Mortgage in Canada: What to Know

Your lender sends you a letter with a rate on it and a date to sign by. You don't have to take that rate, and you don't have to stay with that lender. Since the end of 2024 you can move your mortgage to another lender when your term ends without passing the stress test again, as long as you're not borrowing more and you're not stretching out the years you have left to pay. The rate in the letter is an opening offer. You've got a few months before your term ends to find out what someone else would give you.

Key takeaways

• If your mortgage is with a bank, you get a renewal statement at least 21 days before your term ends, and the rate on it can't go up before your renewal date.
• You don't have to renew where you are. Since late 2024, moving to another lender at renewal doesn't put most people through the stress test again, as long as you keep the same balance and the same years left and take no cash out.
• Leaving at the end of your term costs you no prepayment penalty. It can still cost you discharge, registration, appraisal and admin fees, and a new lender will sometimes cover them.
• Lowering your payment by adding years is the expensive way out. On a $300,000 mortgage at 4%, paying it off over 25 years instead of 20 saves you $235 a month and costs you $38,361 more in interest.

What the letter has to tell you

If your mortgage is with a bank, your lender has to put a renewal statement in your hands at least 21 days before your term ends.¹ Five things have to be on it: what you still owe on the renewal date, the interest rate, how often you'll pay, the length of the new term, and any fees that apply.¹ It also has to say that the rate they're offering you won't go up before your renewal date.¹

That means the offer's still good while you go and check it. You can take the letter, phone three other lenders, and the number in your hand doesn't move.

If your lender's decided not to renew you at all, you get the same 21 days of notice.¹ And if you do nothing, the term may simply renew itself at the rate they quoted, which the statement has to tell you about when that's the plan.¹

Three weeks isn't long enough to compare lenders and get an application approved. If you start a few months before your term ends, you already know what else you could have had by the time the letter lands.¹

Can you get a better rate than the one they sent?

Often, yes. A renewal letter quotes the rate you'll be charged for not asking. You might qualify for a discounted rate below the one they've quoted, and you'll only find that out by asking.¹

You'll do better with something to point at. If you tell your lender what another lender or a broker has offered you, you may need to show proof of it, which is why people keep the emails.¹

If phoning your bank to ask for a lower rate makes you uncomfortable, you're not on your own there. You don't have to argue with anyone. You just say what someone else quoted you, and let them decide whether they want to match it.

Can you move to another lender without passing the stress test again?

For most people, since late 2024, you can. A straight switch at renewal carries no stress test.

If your mortgage wasn't insured, your lender had to check that you could still make the payments at a rate well above what you were actually being charged. The number they use is your contract rate plus two percentage points, or 5.25%, whichever is higher.² Plenty of people clear their real rate comfortably and can't clear that one.

Staying with your existing lender never triggered that test. Moving used to. On November 21, 2024 the Office of the Superintendent of Financial Institutions, the federal regulator that sets the test, dropped the requirement for what it calls a straight switch.³ The rules covering insured mortgages changed to match on December 16, 2024.⁴

A straight switch means you're moving the mortgage you already have. Same amount owing, same number of years left to pay it off, no cash taken out. You're allowed to add up to $3,000 to the balance to cover the costs of moving, and that's it.³⁴

Two things this doesn't cover. If your mortgage sits inside a combined plan that has a line of credit attached, you're outside the change and back to the full test.³ And a new lender still has to approve you. They look at your income and your debts, and they may use different criteria than the lender you've got now.¹

The two rule sets aren't worded identically either. The one covering uninsured mortgages expects you to move to another federally regulated lender.³ The one covering low-ratio mortgages, where you have at least 20% equity, lets you move to any new lender as long as the mortgage started at a federally regulated one.⁴ If you're looking at a credit union, they can tell you which set your mortgage falls under.

What moving actually costs

A switch on your renewal date costs you no prepayment penalty. A penalty applies when you pay more than your contract allows, when you break the contract, when you move to another lender before your term is up, or when you clear the balance early.⁵ Your renewal date isn't on that list.

A mid-term penalty is the higher of three months' interest on your remaining balance, or the interest rate differential.⁵ A $200,000 balance at 6%, with three years left on a five-year term and a posted three-year rate of 4%, works out to about $3,000 on the three-months measure and about $12,000 on the differential, so you'd pay the $12,000.⁵

A switch at renewal costs fees instead. The new lender charges setup fees, which can include discharge, registration and transfer or assignment fees from the lender you're leaving, and there may be an appraisal and other administration on top.¹ The amounts are different from lender to lender. Plenty of new lenders will cover part or all of it for a customer who asks.¹

A collateral charge and mortgage insurance can both slow a switch down. With a collateral charge, moving means paying to remove that charge and register a new one, and you have to repay in full or move across every other loan secured by it, including a car loan or a line of credit.¹ Your lender, your lawyer or your notary can tell you which kind you have.¹

If you increase the loan or stretch the amortization, you may owe a new mortgage insurance premium.¹ If you're already insured, the new lender needs to know, and your current lender can give you the certificate number that saves you paying twice.¹

When the new payment doesn't fit

Your rate moves your payment more than anything else. On a $300,000 mortgage paid off over 25 years, 2.5% costs you $1,343.90 a month and 5% costs you $1,744.81.⁶ That's about $400 a month between them, on the same debt over the same years.

Your own renewal won't be that exact jump. You've paid some of it down since you signed, and you have fewer years left to spread the rest over, so your gap is smaller. It'll move the same way. Run your own numbers on your own balance, the years you have left and the rate you've been quoted.

If the answer is more than your month has room for, your lender will offer to spread the payments over more years. It works. It's also the most expensive thing on the table, and you'll want to know the price before you agree to it.

You can also go the other way with the same lever. If your rate drops and you leave the payment where it is, you finish sooner. Accelerated weekly or biweekly payments put through the equivalent of one extra monthly payment a year, and you'll barely feel it.⁷

If a couple of hundred dollars a month would leave you with nothing spare, you have a buffer problem as well as a mortgage decision, and sizing an emergency fund comes first.

Before you sign it back

Four things change how much you gain by shopping your renewal.

Which kind of charge you have. With a collateral charge you pay more and wait longer to leave than with a standard one, and every other loan secured against your house has to be cleared or moved.¹ Most people find out which kind they've got before they get attached to an offer somewhere else.

Whether your mortgage is insured. Insured or not, that answer tells you which of the two straight-switch rule sets covers you.³⁴ If you put down less than 20%, your maximum amortization was 30 years as a first-time buyer or on a new build, and 25 years otherwise.⁶

Whether your income has changed. A new lender approves you afresh and may judge you by different criteria than the lender you're with.¹ If you've gone self-employed, taken a leave, or your hours have dropped since you last signed, staying put avoids that assessment entirely.

Whether rates have already fallen. You don't always have to wait for your term to end. Some lenders will blend your old rate with the rate on a new longer term, with no prepayment penalty, though administration fees can apply. They have to tell you how they worked out the new rate.⁸

Only your renewal statement has the two numbers every comparison needs. One is your balance on the renewal date. The other is the number of years you have left.

Stay or move?

Most people who like their lender and got a real discount out of them stay. Setup and discharge fees can be worth more than a small gap in rate. Most people who ask for a better rate and get a flat no move, because leaving on the renewal date costs no penalty and the new lender may cover the fees.

If you have a car loan or a line of credit sitting behind a collateral charge, moving means clearing or moving those too, and most people carrying one stay put. People whose income has changed since they signed mostly stay as well, since a new lender would put them through a fresh approval and the current one won't.

Fees, the charge registered on your house, and whether a new lender would approve you today usually matter more than the gap in rate.

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Common questions

How much notice does my bank have to give me before my mortgage renews?+

At least 21 days before the end of your term, if your mortgage is with a federally regulated lender such as a bank. They owe you the same 21 days if they've decided not to renew you. Three weeks isn't long enough to shop properly, which is why most people start a few months earlier.

Do I have to pass the stress test again if I switch lenders at renewal?+

Not for a straight switch, which means you keep the same amount owing and the same years left to pay, and you take no cash out. You're allowed up to $3,000 added to the balance to cover the costs of moving. Anything beyond that makes you a fresh application, tested at your contract rate plus two percentage points or 5.25%, whichever is higher.

Will I pay a penalty for leaving my lender at renewal?+

No. Prepayment penalties apply when you leave in the middle of a term, and you're at the end of one. You'll still face setup, discharge, registration and appraisal fees, and a new lender will sometimes cover some or all of them.

What happens if I just ignore the renewal letter?+

Your term may renew automatically at the rate they quoted, and the renewal statement has to say so where that's the lender's plan. It's the rate they quote by default, so it's rarely the best one you could get.

Can I lower my mortgage payment at renewal?+

Usually, by spreading what you owe over more years. On a $300,000 mortgage at 4%, paying it off over 25 years rather than 20 lowers the payment by about $235 a month, and it adds $38,361 to the interest you'll pay over the life of it.

My mortgage is with a credit union. Do these rules apply to me?+

The 21-day renewal statement is a rule on federally regulated lenders, so it doesn't bind a provincially regulated one. On switching, the rules for low-ratio mortgages let you move to any new lender at renewal without the stress test, as long as the mortgage was originally taken out at a federally regulated lender and you're keeping the same amortization.

Sources

1. FCACRenewing your mortgage: the 21-day renewal statement and what it must contain, the rate holding until the renewal date, automatic renewal, starting to shop a few months out, negotiating a discounted rate, the costs of changing lenders, mortgage insurance premiums on a switch, and collateral charges. Accessed 2026-09-02.
2. OSFIMinimum qualifying rate for uninsured mortgages: the greater of the contract rate plus 2% or 5.25%, made up of a 2% buffer and a 5.25% floor. Accessed 2026-09-02.
3. OSFILetter of November 21, 2024 exempting uninsured straight switches from the prescribed minimum qualifying rate: no increase to the remaining amortization or the loan amount, up to $3,000 added for transaction costs, no equity take out, and combined loan plans excluded. Accessed 2026-09-02.
4. Department of Finance CanadaStraight switches and portfolio insurance, December 16, 2024: the minimum qualifying rate removed for low-ratio renewals, meaning loan-to-value up to 80%, switching to any new lender where the mortgage was originated at a federally regulated institution and the amortization schedule is maintained. Accessed 2026-09-02.
5. FCACMortgage fees, prepayment penalties: when a penalty applies, the higher of three months' interest or the interest rate differential, and the published $200,000 example giving about $3,000 against about $12,000. Accessed 2026-09-02.
6. FCACMortgage terms and amortization: Figure 2, the monthly payment on a $300,000 mortgage over 25 years at rates from 2.5% to 5.2%; Figures 3 and 4, the payment and total interest at 4% over 10, 15, 20 and 25 years; and the maximum amortization with less than 20% down. Figure 2 prints the 4% payment as $1,587.06 while Figures 3 and 4 print $1,578 for the same case; $1,578 reconciles with the interest published beside it, and $1,578 is the figure used here. Accessed 2026-09-02.
7. FCACPaying off your mortgage faster: accelerated weekly or biweekly payments make the equivalent of one extra monthly payment a year. Accessed 2026-09-02.
8. FCACBreaking your mortgage contract: the blend-and-extend option, carrying no prepayment penalty but possible administration fees, with the lender required to explain how it calculates the blended rate. Accessed 2026-09-02.

Educational, not financial advice. Figures verified against primary sources on the date shown.

See it in a story: "Treading Water," where Nadia and Theo find out what their month actually costs them. If a bigger payment has to come from somewhere, giving every dollar a job is where you find it, or browse the budgeting hub.