Mortgage Renewal in Canada: 6 Things to Do Before You Sign

When your mortgage renews in Canada, the renewal letter from your lender is an offer, not a done deal. You can read it closely, shop other lenders, negotiate, or switch. This guide explains six things to do before you sign.

Why renewals matter right now

About twelve percent of all mortgages in Canada are in the final group of five-year loans signed during the pandemic. In May 2026, the Bank of Canada said they would renew over the following year, into mid-2027, with payments up about fifteen percent on average.

On October 28, 2026, the Bank of Canada raised its policy rate by a quarter point, to 2.5%.

The rules below are for banks and other federally regulated lenders, checked on 8 November 2026. If your mortgage is with a credit union, the credit union can tell you which rules apply.

Two words to know first

• Term: the length of your contract, for example five years.
• Amortization: the total time to pay off the whole loan.

When a term ends, you renew.

1. Watch for your renewal statement

If your lender is a bank or another federally regulated lender, it has to send you a renewal statement at least 21 days before your term ends.

The statement shows:

• what you still owe
• the rate it's offering
• how often you pay
• the length of the new term
• any fees

It also has to say that the offered rate won't go up before your renewal date.

Keeping it next to your current mortgage papers shows exactly what changes. Twenty-one days is the minimum, and it isn't much time. That's why the next steps start before the letter arrives.

2. Don't let it renew on autopilot

If you do nothing, your mortgage may renew automatically. That's easy, but the rate in the letter may not be the best rate you could get.

Your statement has to tell you if your lender plans to renew automatically. Putting that date in your calendar keeps the deadline from slipping by. It helps to treat the letter as a first offer.

3. Shop a few months early

You don't have to wait for the letter. A few months before your term ends, you can ask other lenders what they would offer you. A mortgage broker is another option. A broker can compare offers from several lenders for you.

Asking everyone the same questions makes the answers easy to line up:

• What's the rate?
• How long is the term?
• Is it fixed or variable?
• What would it cost me to switch?

Starting early gives you time to compare, and to move if another lender offers a better deal. If you wait for the letter, you may have as little as three weeks.

Getting every offer in writing helps with the next step.

4. Negotiate with written offers

Your lender may give you a lower rate than the one in the letter. It helps to ask.

How it usually works:

• You tell your lender you're comparing offers.
• They may ask for proof, so you show them the written offers you collected.
• You ask if they can match or beat them.

Being specific helps. That means naming the rate and the term another lender offered you, and the date on that offer. Fees and prepayment rules are worth asking about too, and any new offer can be put in writing before you agree to it.

To see how a different rate or term changes your payment, try the mortgage renewal calculator.

5. Know the straight switch rule

Moving your mortgage to a new lender at renewal, with the same amount and the same amortization, is called a straight switch.

How the stress test works

For a new uninsured mortgage, a bank usually checks that you could still pay at a higher rate. That's the stress test.

• Your contract rate is the rate you'd actually pay.
• The test rate is your contract rate plus two percentage points, or 5.25%, whichever is higher.

What changed in 2024

Since November 21, 2024, a straight switch of an uninsured mortgage from one federally regulated lender to another doesn't need that stress test. The new lender still checks that you can afford the payments.

There's one catch. This only covers a straight switch. If you borrow more or stretch your amortization, it's no longer a straight switch.

Switching can still cost money

Possible costs include:

• a fee from your old lender to release or transfer the mortgage
• a home appraisal
• admin fees

You can ask the new lender to cover them. It's also worth checking your papers for the words collateral charge. That's a way some mortgages are registered. With a collateral charge, you may have to pay fees to remove and re-register it, and any other loans it secures have to be dealt with.

6. Think twice before stretching your amortization

When the new payment looks too big, you may be offered more years to pay off the loan. Your payment goes down, but you pay interest for longer. Every extra year on the loan is another year of interest on what you still owe.

The Financial Consumer Agency of Canada warns that the extra interest can add up to thousands, or even tens of thousands of dollars. The Bank of Canada says some borrowers have done this to soften the increase.

If you're thinking about it, you can ask your lender for the total interest under both options, side by side, before you decide.

Side note: breaking your mortgage early

Breaking a mortgage before your term ends usually means a penalty. It's usually the higher of:

• three months' interest, or
• the interest rate differential (IRD), which is roughly the interest your lender loses when today's rates are lower than yours.

Here's the Financial Consumer Agency of Canada's own example. You owe $200,000 at 6%, with 36 months left. Your lender's posted rate, the rate it advertises, is now 4%.

• Three months' interest is $3,000.
• The IRD is $12,000, a two-point gap over three years.

The higher one applies, so the penalty would be $12,000.

At renewal, your term is already over. That's one more reason people make their changes then.

Putting it together

1. A few months before your term ends: start shopping with other lenders and a broker.
2. When the letter arrives: compare it with your written offers.
3. Before the date in the letter: decide.

Your renewal is a decision. Give it a few months, and you sign knowing your options.

Common questions

How early does my lender have to send a renewal statement?

If your lender is a bank or another federally regulated lender, it has to send the renewal statement at least 21 days before your term ends. That's a minimum, so many people start shopping a few months earlier.

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

Not for a straight switch between federally regulated lenders. Since November 21, 2024, moving an uninsured mortgage to a new lender at renewal, with the same amount and the same amortization, doesn't need the stress test. The new lender still checks that you can afford the payments.

Can I negotiate my mortgage renewal rate?

Yes. Your lender may give you a lower rate than the one in the letter, and it may ask for proof of other offers.

What happens if I ignore my renewal letter?

Your mortgage may renew automatically, at a rate that may not be the best one you could get. Your statement has to say if your lender plans to do this.