Mortgage renewal in Ontario
The letter in your mailbox is an offer. Roughly seven in ten Canadians sign it without asking a single question.
Direct answer
Start shopping your mortgage renewal 120 days before maturity. Your existing lender’s renewal offer is an opening position, not their best rate, lenders price on the assumption most borrowers won’t shop.
Since November 2024, federally regulated lenders no longer apply the mortgage stress test to a straight switch at renewal, where the balance and amortization are unchanged. That means switching lenders for a better rate is easier than it has been in years, and many lenders cover the legal and appraisal costs of the switch.
On this page
Why the renewal offer is almost never the best rate
Nothing sinister. It’s just pricing to behaviour. Lenders know a large majority of borrowers renew without shopping. So the renewal letter goes out at a rate that’s defensible but comfortably profitable, and a better rate sits behind a phone call you have to make.
Call and say, “I have a competing offer at X, can you match it?” and the rate usually moves. But you need a real competing offer for that sentence to work, and getting one takes a couple of days, not a couple of hours. Which is why the timeline below matters more than the negotiation script.
The rule change that made switching easy
Until late 2024, if you wanted to move your mortgage to a different lender at renewal, that new lender had to stress-test you. You had to qualify at the greater of contract rate plus 2% or 5.25%, even though you were simply continuing a mortgage you’d been paying for years. Homeowners whose finances had tightened were effectively trapped with their existing lender, who knew it.
In November 2024, OSFI confirmed that federally regulated lenders are no longer expected to apply the minimum qualifying rate to a straight switch at renewal, same balance, same remaining amortization, new lender. That single change restored competition to renewals.
Note the boundaries: increase the balance or extend the amortization and it becomes a refinance, with full qualification. Credit unions are provincially regulated and set their own policy. And a lender still underwrites your credit and property.
The 120-day renewal timeline
| When | Action |
|---|---|
| 120 days out | Request a rate hold. Get an independent set of quotes. Ask your lender for their renewal offer early. Most will give it. |
| 100 days out | Decide the structure, not just the rate: fixed or variable, term length, whether you want a readvanceable component, and whether any debt should be folded in. |
| 90 days out | Take the best outside offer back to your current lender. Ask them to beat it. Get the answer in writing. |
| 60 days out | If switching, submit the application. Straight switches are quick, documents are minimal. |
| 30 days out | Lawyer or lender’s title service completes the switch. Confirm the first payment date and amount. |
| Maturity | New mortgage funds. Old one discharged. No penalty, because the term ended. |
Renewal is a bigger decision than the rate
Rate is the visible number. These are the ones that cost more over five years:
- Prepayment privileges. 20% lump sum plus 20% payment increase versus 10/10 is a meaningful difference if you intend to attack the balance.
- The penalty formula. Ask how the IRD is calculated before you sign. A lender using posted rates in the calculation is quietly expensive if life changes.
- Standard charge versus collateral charge. A collateral charge can make future switching harder and more expensive.
- Amortization. Renewal is a free opportunity to shorten it. Most people unthinkingly continue the existing schedule.
- Term length. Three-year terms have been the quiet winner for many households navigating a shifting rate environment, but this depends entirely on your plans, not on forecasts.
- Fold in the debt. No penalty at maturity makes renewal the cheapest possible moment to consolidate. See consolidation.
The 2025–2026 renewal wave
An enormous cohort of Canadian mortgages originated in 2020 and 2021, at rates that will never return. Those five-year terms are maturing now. For many households the payment increase at renewal is substantial. This is the single most common reason people call me.
If your payment is about to jump meaningfully, the options are more numerous than most people realize: extending amortization, switching lenders, restructuring other debt into the mortgage to reduce total outflow, or a combination. The worst option is discovering the new payment when it comes out of your account.
Start the conversation at 120 days. If you’re already inside that window, start today.
Written and reviewed by Derrick Johnston, Mortgage Agent Level 2, BRX Mortgage Inc. (FSRA #13463). Lender and regulatory policies change; confirm current rules before acting.
Straight answers
Frequently asked questions
Do I have to requalify when I renew my mortgage?
Not if you stay with your existing lender, renewing in place requires no requalification. If you switch lenders, the new lender underwrites you. Since November 2024, OSFI no longer requires federally regulated lenders to apply the stress test to a straight switch at renewal, where the loan amount and amortization are unchanged. That removed the biggest barrier to shopping your renewal.
How early can I start shopping my mortgage renewal?
Most lenders will hold a rate for 120 days. Start at the 120-day mark. That gives you time to get competing offers, use one as leverage with your current lender, and switch without rushing if you decide to move.
Is it worth switching lenders at renewal for a small rate difference?
On a $500,000 balance, 0.25% is roughly $1,250 a year, or about $6,250 over a five-year term. Switching costs are often $0 because many lenders cover legal and appraisal fees on a straight switch. So yes, usually. Compare the total cost, not just the rate.
What happens if I do nothing when my mortgage renews?
Most lenders will automatically renew you, frequently into a posted or near-posted rate, and sometimes into a short open term at a much higher rate. Automatic renewal is designed for the lender’s benefit. It is the single most expensive default setting in Canadian personal finance.
Can I consolidate debt at renewal?
Yes, and renewal is the ideal moment. There is no prepayment penalty when your term ends. If you want to increase the balance, it becomes a refinance rather than a straight switch, so full qualification including the stress test applies. Plan it 120 days out.
Next step
A 30-minute call tells you whether there's money on the table.
No application, no credit pull, no pitch. Bring your current mortgage balance, your renewal date, and a rough list of what you owe elsewhere. You'll leave the call knowing your options and what each one costs.