Mortgage Renewal in Canada: The Complete Guide

Short answer: mortgage renewal in Canada happens when your mortgage term ends and you sign a new term for the balance you still owe. You can renew with your current lender, switch to a new lender, or refinance to change the amount or structure of your loan. FCAC recommends you start shopping a few months before your term ends, rather than waiting for your renewal letter, and reminds you that you may qualify for a lower rate than the one you're offered ^[1].

This guide explains how renewal works across Canada, the rules that protect you, and how to choose between staying, switching and refinancing. If your renewal is coming up, our mortgage renewal team can compare your lender's offer with options from 65+ lenders.

What this guide covers:

• What renewal is, and the timeline from six months out to maturity day

• Your three options: renew, switch or refinance

• Negotiating with your lender, and the stress-test rules for switching

• Costs, choosing your next term, and a worked example

• Renewing when your finances have changed, plus a step-by-step plan

What is a mortgage renewal?

A mortgage renewal is the point at the end of your mortgage term when you either repay the remaining balance in full or agree to a new term with a lender. The term is the length of your current contract, which can range from a few months to five years or longer. The amortization is the total time it will take to pay the mortgage off. Because most amortizations are much longer than a single term, most homeowners renew several times ^[1].

At renewal, your rate, term and conditions reset, and your balance carries over. Your amortization continues from where it was, unless you choose to change it.

How mortgage renewal works in Canada: the timeline and your rights

Federal rules and guidance give you more notice, and more control, than many homeowners realize. Here's what applies if your mortgage is with a federally regulated lender, such as a bank:

Two details are worth knowing. First, the renewal statement must say that the rate offered won't increase until your renewal date ^[1]. Second, if you take no action, your mortgage may renew automatically, and the statement will tell you if that's your lender's plan ^[1]. Automatic renewal isn't a disaster, but it means you haven't compared.

Credit unions and other provincially regulated lenders follow provincial rules, which can differ. Check your mortgage agreement or ask your lender what notice they give.

Your mortgage renewal options: renew, switch or refinance

Some lenders also offer a blend-and-extend before maturity: your current rate is blended with today's rate for a new, longer term, without a prepayment penalty, though fees may apply ^[10]. It can make sense if you want to lock in earlier than your lender's renewal window.

How to negotiate your mortgage renewal

Treat your renewal letter as an opening offer. FCAC says you may qualify for a discounted rate that's lower than the one in your renewal letter, and suggests telling your lender about offers you've received from other lenders or brokers. You may need to show proof of those offers, so keep them on hand ^[1].

A practical approach:

• Get at least one written offer from another lender before you call your current lender. A broker can source several at once.

• Ask your lender to match or beat it, and give a clear deadline that still leaves time to switch.

• Compare the whole package, not just the rate: prepayment privileges, how the penalty is calculated, portability and term length.

• Ask whether the rate drops if rates fall before your renewal date. FCAC suggests asking this about any rate hold ^[5].

If your bank is federally regulated, it must offer products that are appropriate for your circumstances and tell you if it has assessed a product as not appropriate for you ^[1]. Describe your plans clearly, for example if you might sell, renovate or make large prepayments.

See how your renewal offer compares. Today's best rates across 65+ lenders, OAC. Compare today's rates

Switching lenders at mortgage renewal: the stress-test rules

Since November 21, 2024, OSFI no longer expects federally regulated lenders to apply its minimum qualifying rate when you move an uninsured mortgage from one federally regulated lender to another at renewal ^[7]. To count as an uninsured straight switch:

• The mortgage moves from one federally regulated lender to another.

• You don't increase the remaining amortization or the loan amount. The balance can rise by up to $3,000 to cover transaction costs such as fees, but you can't take out equity ^[7].

• It's a stand-alone, amortizing mortgage, not part of a readvanceable or combined loan plan with a line of credit ^[7].

The new lender still underwrites you like any new client, checking your credit, income and debt ratios ^[7]. Separately, insured mortgage holders can switch lenders at renewal without facing another stress test, under the strengthened Canadian Mortgage Charter ^[8].

The current qualifying rate, where it does apply, is the greater of 5.25% or your contract rate plus 2% ^[9].

What does it cost to switch lenders at mortgage renewal?

There's no prepayment penalty when you leave at maturity, but there can be setup and transfer costs. FCAC lists these as fees to ask about ^[1]:

• Discharge, registration, transfer or assignment fees from your current lender.

• An appraisal to confirm the value of your home, if the new lender needs one.

• Legal or notary fees, since you may need to sign registration documents with a lawyer or notary.

• Other administration fees.

Ask whether the new lender will pay some or all of these; FCAC encourages you to ask, and some lenders will ^[1].

Two situations can add cost. If your mortgage is registered as a collateral charge, switching may involve fees to remove that charge and register a new one, and any other loans secured by it, such as a line of credit or car loan, must be paid out or moved too ^[1]. And if you increase the amount or extend the amortization of an insured mortgage, you may have to pay a new mortgage loan insurance premium. Tell your new lender about your existing insurance and ask your current lender for the certificate number so you don't pay twice ^[1].

Choosing your next mortgage term: what to compare

The right term depends on your plans and budget more than on any rate forecast. For context, the Bank of Canada's policy rate is 2.25%, unchanged at every 2026 decision so far, and its next announcement is October 28, 2026 ^[11]. Variable rates follow lenders' prime rates; fixed rates are priced off bond yields, so they can move independently.

Fixed or variable at renewal? A fixed rate keeps your payment the same for the whole term, which helps if your budget is tight or you value certainty. A variable rate moves with your lender's prime rate. Depending on the product, either your payment changes when prime changes, or your payment stays the same and the split between interest and principal shifts. Ask which type you're being offered. A simple test: if the variable rate rose by a percentage point, would the payment still be comfortable? If yes, you have a genuine choice. If not, a fixed rate may let you sleep better. Variable mortgages may calculate the penalty to break differently from fixed ones, so check your contract ^[12].

Federally regulated lenders must show prepayment privileges and penalties in an information box at the start of your mortgage agreement, which makes offers easier to compare ^[12]. One more protection: under the Interest Act, if a mortgage term is longer than five years, you can repay it after the fifth year with no more than three months' interest as a penalty ^[13].

For a deeper look at where rates could go, see will mortgage rates go up in 2027 and our analysis of a possible Bank of Canada rate hike in 2026.

Worked example: what a better renewal rate is worth

Illustration (OAC, not an offer; illustrative rates, not current market quotes): you owe $500,000 with 22 years of amortization left and choose a five-year fixed term.

A 0.25-point difference lowers the payment by about $68 a month, saves about $4,040 in payments over the term, and leaves the balance about $1,870 lower. That's roughly $5,900 in total, before any switching costs the new lender doesn't cover. If your current lender matches the competing offer, you get the same benefit without switching.

Try your own numbers with our mortgage renewal calculator.

Mortgage renewal when your finances have changed

Renewal can feel stressful if your income has dropped, you've taken on new debt, or your payment is set to change. There are practical options:

• A straight renewal with your current lender usually involves less paperwork than switching, because you're not applying to a new lender. In our experience, it's often the simplest path if your income has changed. Talk to your lender early.

• Ask about relief if you're in financial difficulty. Under the Canadian Mortgage Charter, federally regulated lenders are expected to offer tailored help, including temporary amortization extensions and waived fees on relief measures for a limited period ^[2].

• Consider the term and payment structure. A different term length or payment frequency may suit your cash flow better.

• Think carefully before extending your amortization. It lowers the payment, but FCAC notes the extra interest can add up to thousands or tens of thousands of dollars ^[1]. If you extend, plan to use your prepayment privileges later.

• Look at the bigger picture. If high-interest debt is the pressure point, refinancing at renewal to consolidate it may lower your total monthly outgoings.

A broker can tell you early whether switching is realistic for your situation, so you're not relying on a last-minute application.

Mortgage renewal with a credit union, alternative or private lender

Not every mortgage is with a bank. The FCAC renewal rules described above apply to federally regulated lenders, such as banks ^[1]. Many credit unions are provincially regulated and follow provincial rules and their own policies, so ask what notice and options they offer. The stress-test exemption for uninsured switches also applies only between federally regulated lenders ^[7].

If you're with an alternative or private lender, terms and renewal fees vary, so read your renewal offer carefully. Use the renewal as a checkpoint: if your credit, income or equity has improved, it may be the right time to move back to a lower-cost lender. 8Twelve arranges mortgages through 65+ lenders, including alternative and private lenders; we don't lend or fund mortgages ourselves. Our guide to private mortgage refinance fees in Ontario explains the costs to expect.

Documents to have ready if you switch or refinance: your renewal statement or latest mortgage statement, photo ID for everyone on title, proof of income (recent pay stub and employment letter, or two years of tax returns and Notices of Assessment if you're self-employed), your latest property tax bill, and condo fee details if applicable. Having these ready early is the easiest way to keep a switch on schedule.

Refinancing at renewal

Renewal is usually the lowest-cost moment to change the size or shape of your mortgage, because there's no prepayment penalty at maturity. A refinance is still a new loan: you can generally borrow up to 80% of your home's appraised value ^[14], and you'll need to pass the stress test ^[9]. Common reasons include paying out higher-interest debt, funding renovations, or reworking the amortization. Our mortgage refinancing page explains how it works, and debt consolidation covers rolling other debts into your mortgage.

Step by step: your mortgage renewal plan

1. Six months out: gather the basics. Your maturity date, balance, remaining amortization and charge type (standard or collateral). Note any plans to move, renovate or consolidate debt.

2. Four to six months out: set your goals. Target payment, term length, fixed or variable, and how much you might prepay.

3. About four months out: compare and hold a rate. Ask a broker to compare offers, and lock a rate hold.

4. Two to three months out: negotiate. Share a competing written offer with your current lender and ask them to match it.

5. One to two months out: decide and apply. Choose renew, switch or refinance. If you're switching, send documents early to leave time for approval and legal work.

6. 21 days out: check your renewal statement. Confirm the numbers and make sure your mortgage won't renew automatically on terms you didn't choose ^[1].

7. Maturity day: your new term begins, or your new lender pays out the old mortgage.

Early renewal and blend-and-extend

If rates have moved and you want certainty before your renewal window opens, you have two routes. Renewing earlier than your lender's penalty-free window usually means breaking the mortgage and paying a prepayment penalty ^[10]. A blend-and-extend avoids the penalty by blending your current rate with a new one. FCAC's example: a 5.5% rate with 24 months left, blended with a 4% rate over a new 60-month term, works out to about 4.6% ^[10]. Your lender must explain how it calculates the blended rate ^[10]. Compare the blended rate with what you could get by simply waiting for renewal.

From our desk: The homeowners who feel best about their renewal aren't the ones who guessed rates correctly. They're the ones who started early, held a rate, and had a second written offer to put in front of their lender.

The bottom line

Mortgage renewal in Canada gives you a regular chance to reset your rate, term and lender without a prepayment penalty. Start four to six months out, treat your renewal letter as an opening offer, compare full terms from several lenders, and decide before the mortgage renews automatically. If you need to borrow more or restructure, renewal is usually the best time to do it.

Check your renewal numbers. Estimate your new payment with our mortgage renewal calculator.

This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of October 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.

Lender renewal windows (TD, BMO) are examples from those lenders' public pages as of October 20, 2026, and can change; check your own mortgage terms. The policy rate is from the Bank of Canada as of October 16, 2026. Example payments use semi-annual compounding and are illustrations only.