Mortgage renewal rates: why your offer may differ from the rate you see advertised
The rate in your renewal letter is often higher than the rates you see advertised for new buyers. That gap usually has an explanation: insurance, timing, risk and the fact that the first renewal offer is a starting point. Here's why mortgage renewal rates differ and what to do about it.
Mortgage renewal rates often differ from the rates advertised for new purchases because lenders price each mortgage by its risk and cost to them. Advertised rates are often for insured purchases with a quick closing, while many renewing borrowers have uninsured mortgages, a different term or need new money. The rate in your renewal letter is also a first offer: FCAC says you may qualify for a lower rate by negotiating and showing competing offers, and if you do nothing your mortgage may renew automatically. In our example, a 0.40-point lower rate on a $450,000 balance with 20 years left saves about $96 a month and about $8,430 in interest over a five-year term.
Key takeaways
- →Your renewal offer is a starting point. FCAC says you may qualify for a lower rate than the one in your renewal letter if you negotiate and show other offers.
- →Advertised rates are often for a specific borrower, usually an insured purchase with a short closing, so they may not match your mortgage.
- →Insured and uninsured mortgages are priced differently. In our experience, insured mortgages often get the sharpest rates.
- →Switching lenders is an option: insured borrowers and uninsured straight switches between federally regulated lenders don't face a new stress test.
- →Small gaps add up. In our example, 0.40 points on $450,000 is about $8,430 in interest over five years.
Short answer: Mortgage renewal rates often differ from the rates you see advertised for new purchases because lenders price each mortgage by its risk, its size, its term and whether it's insured. Advertised rates are frequently for insured purchases, while many renewing homeowners have uninsured mortgages. And the rate in your renewal letter is a first offer. FCAC says you may qualify for a discounted rate lower than the one quoted, especially if you show proof of competing offers [1].
This guide explains why the numbers differ, what a small gap costs and how to compare offers calmly. To see where today's rates sit, start with our current mortgage rates page.
Why renewal and new-purchase rates aren't the same
Rates are set mortgage by mortgage. In our experience, these are the main reasons your renewal rate may not match the rate in an ad:
| Factor | Why it changes the rate |
|---|---|
| Insured vs uninsured | Mortgages with default insurance carry less risk for the lender, so in our experience they often get lower rates. Many renewals are uninsured because the original down payment was 20% or more. |
| Insurable vs uninsurable | Insurance has limits: the purchase price must be under $1.5 million, and amortizations are capped (30 years only for first-time buyers and new builds) [2]. A mortgage outside those limits is often priced higher. |
| New money | If you add to your balance or extend your amortization, it's no longer a simple renewal, and the stress test applies to most new uninsured mortgages [3]. |
| Term and type | A 5-year fixed, a 3-year fixed and a variable rate are all priced differently. Compare like with like. |
| Timing | A rate hold on a purchase can lock a rate for 60 to 130 days, depending on the lender [4]. Your renewal offer reflects the market when it's sent. |
| The first offer | The renewal letter is often not the lowest rate your lender will accept. FCAC encourages you to negotiate [1]. |
Rows marked "in our experience" reflect what we see across lenders; pricing policies vary by lender.
What your renewal statement must tell you
If your lender is federally regulated, such as a bank, it must send a renewal statement at least 21 days before your term ends, showing your balance, rate, payment frequency, term and any fees [1]. If the lender plans to renew automatically, the statement will say so. FCAC warns that doing nothing may mean you don't get the best rate and conditions [1]. Don't wait for the letter: FCAC suggests shopping around a few months before your term ends [1].
Got your renewal letter? A licensed 8Twelve agent can compare it with offers from 65+ lenders and give you a written quote to negotiate with, OAC. Compare renewal options
What a small rate gap is worth: a worked example
You owe $450,000 with 20 years of amortization left and are choosing a five-year fixed term. Your renewal letter offers 4.79%. A competing offer is 4.39%.
| Renewal rate | Monthly payment | Interest over 5 years | Balance after 5 years |
|---|---|---|---|
| 4.79% (letter) | about $2,906 | about $98,190 | about $373,810 |
| 4.59% (0.20 lower) | about $2,858 | about $93,970 | about $372,470 |
| 4.39% (0.40 lower) | about $2,811 | about $89,760 | about $371,120 |
Rates are assumptions for illustration, not offers. Calculated in Python with semi-annual compounding.
What it shows: 0.40 points saves about $96 a month and about $8,430 in interest over the term. Even 0.20 points is worth about $4,220. That's why the first offer is worth a second look, whether you stay or switch.
Should you stay or switch?
Staying is often simplest, and your lender may match a competitive offer. Our mortgage renewal negotiation scripts show how to ask.
Switching can make sense when the gap is meaningful after costs. FCAC notes a new lender must approve you and may use different criteria, and there may be discharge, appraisal and setup costs; ask whether the new lender will pay some or all of them [1]. Since the Canadian Mortgage Charter changes, insured mortgage holders can switch at renewal without a new stress test [2], and OSFI doesn't expect federally regulated lenders to apply it to uninsured straight switches with no increase to the loan or amortization [3]. Our guide to the mortgage switch stress test explains who qualifies, and mortgage transfer fees breaks down the costs.
Where rates stand now
The Bank of Canada raised its policy rate by a quarter point to 2.5% on October 28, 2026 [5]. That moves prime and variable rates directly. Fixed rates tend to follow bond yields, which can move before or after a Bank of Canada decision. Either way, your renewal decision is about the offers in front of you, not a forecast. Our guide to fixed vs variable mortgages can help you pick a type.
Step by step: getting a fair renewal rate
- Start early. Three to four months before your term ends, note your balance, amortization and renewal date.
- Get two or three written offers for the same term and type.
- Ask your lender to match the best written offer [1].
- Price any switch: discharge, legal and appraisal costs, and whether the new lender covers them [1].
- Decide before the deadline, so your mortgage doesn't renew automatically on terms you didn't choose [1].
From our desk: the most common call we get is from someone who signed the renewal letter because the rate "looked normal." It often was. The question is whether it was the best fit for them, and the only way to know is to compare it with another written offer.
Mortgage renewal rates differ from advertised rates for real reasons, but the first offer isn't final. Shop early, compare like with like and negotiate with a written offer in hand.
Run the numbers: compare offers with our mortgage renewal calculator, or read our complete mortgage renewal guide.
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.
Example rates are for illustration only, as of November 1, 2026, and are not offers. Rates, terms and switching costs vary by lender and your situation; approval is OAC. Rules checked against FCAC, OSFI, the Department of Finance and the Bank of Canada on November 1, 2026. 8Twelve does not lend or fund mortgages; we arrange them with third-party lenders.
Frequently asked questions
Sources
- Renewing your mortgage - FCAC
- Boldest mortgage reforms in decades come into force today (Dec 15, 2024) - Department of Finance Canada
- Minimum qualifying rate for uninsured mortgages - OSFI
- Getting preapproved for a mortgage (rate holds) - FCAC
- Policy interest rate - Bank of Canada
Last reviewed on November 4, 2026