At renewal you can stay with your lender, switch to a new lender, refinance, or break the mortgage early. Since November 21, 2024, a straight switch at renewal (same amount, same amortization) does not require passing the mortgage stress test again. Do not sign the first renewal letter without comparing offers, because the rate you accept sets your payments for the next term.
What are my options when my mortgage comes up for renewal?
- Renew with your current lender. Easiest, but the first offer is not always the best rate.
- Switch to a new lender. You move the remaining balance to another lender at the end of your term, often for a better rate.
- Refinance. You change the loan amount or terms, for example to access equity or consolidate debt. This usually requires qualifying again.
- Break the mortgage early. You pay a penalty to leave before the term ends, for example to sell or to lock in a lower rate.
Do I need to pass the stress test to switch lenders?
Since November 21, 2024, borrowers with federally regulated lenders can switch lenders at renewal without re-qualifying under the stress test, as long as the loan amount and amortization stay the same (a "straight switch"). Insured mortgages were already exempt. If you want to increase the amount or extend the amortization, normal qualification rules apply. Your broker or lender can confirm how this applies to your mortgage.
When should I start shopping?
Start several months before your term ends. Lenders typically send a renewal offer ahead of maturity, and many allow you to lock in a rate early. Compare at least your current lender's offer against one or two others, and ask a mortgage broker or lender what you would save over the full term, not just the monthly payment difference.
What should I compare besides the interest rate?
- Prepayment rights: how much extra you can pay each year without penalty.
- Penalty rules: for a variable rate mortgage, the penalty is commonly three months of interest. For a fixed rate, it is commonly the greater of three months of interest or the interest rate differential, which can be much larger.
- Portability and assumability: whether you can take the mortgage to your next home.
- Switching costs: legal, appraisal and discharge fees, and whether the new lender covers any of them.
- Term length: a shorter term gives flexibility; a longer term gives payment certainty.
What if I plan to sell or move in the next few years?
Think about the penalty and portability before you choose a term. If you may move soon, a shorter term or a mortgage with flexible prepayment and portability can cost less than a lower rate with a high break penalty. Read about buying before you sell, and ask Mario for a current value of your home so you know your equity.
Mario is a REALTOR®, not a mortgage broker or lender. Talk to your lender or a mortgage broker for rate and qualification advice.
Related guides
- Buying before you sell: your options in Waterloo Region
- First-time home buyer guide for Waterloo Region
General information, not legal, tax or financial advice. Rates, limits and rules change; confirm with your lawyer, lender or accountant.
Mortgage renewal in Ontario: your options: frequently asked questions
No. You can switch lenders at renewal. Since November 21, 2024, a straight switch does not require passing the stress test again.
Moving your mortgage to a new lender at renewal without changing the loan amount or the amortization.
For variable rate mortgages it is commonly three months of interest. For fixed rate mortgages it is commonly the greater of three months of interest or the interest rate differential. Check your own mortgage terms.
Several months before your term ends. Lenders usually send a renewal offer ahead of maturity and many let you lock in early.
Questions about your situation?
Mario gives straight answers on buying, selling and investing across Kitchener, Waterloo and Cambridge.