Mortgage renewal in Canada.Don't sign the letter first.
Roughly 60% of Canadian mortgages come up for renewal between now and 2027 — most of them originated when 5-year fixed rates sat between 1.5% and 2.5%. This is the operator's manual: what the payment shock actually looks like, the OSFI carve-out that lets you switch lenders without re-qualifying, and the moves that save the most interest.
Written and reviewed by the Canadian Mortgage Compass Editorial Desk. Educational information, not mortgage advice.
Illustrative scenario
Model the payment change at renewal.
Every input below is an assumption you set, including the renewal rate. This is an arithmetic illustration, not a rate quote or a forecast — your actual renewal rate is set by your lender.
The 2025–2026 renewal wave
Bank of Canada rate cuts began in mid-2024, but the average renewing borrower in 2026 is still walking from a ~2% contract rate to a 4.4%–5.2% renewal rate. The Bank's own Financial System Review flags this as the largest concentrated payment-shock event since the early 1990s — and it unfolds unevenly, because the 2020–2021 fixed-term cohort dominates.
Two things are true at the same time: the average payment increase is real (typically 20–40%), and the shock is entirely modellable. Nothing about your renewal is a surprise to your lender — which is why the renewal letter arrives with a posted-rate anchor and a "sign here" line.
Payment shock — the math that matters
Payment shock is the percentage change from your current mortgage payment to your renewal payment. On a $600,000 balance at 5 years elapsed of a 25-year amortization, going from 1.99% to 4.79% is a payment jump from roughly $2,540/mo to $3,120/mo — a 22.8% shock. Above 20% is material; above 40% is where lenders start actively restructuring the file.
The renewal calculator does the exact math, with a rate-band for the range, remaining-amortization payment, and total interest cost over the next 5-year term.
The straight-switch rule — OSFI's November 2024 carve-out
Before November 21, 2024, switching lenders at renewal on an uninsured mortgage required re-qualifying under the OSFI B-20 stress test. OSFI removed that requirement for like-for-like straight switches: same amortization, same balance, same borrower(s). You no longer have to pass the stress test to shop your renewal.
What still triggers the stress test: pulling equity out (refinance), extending the amortization, adding or removing a borrower, or changing the property. On a clean renewal switch — same file, new lender — the file is verified but not stress-tested. This is the single largest structural change to Canadian mortgage renewals in a decade.
See the full mechanics in the stress test guide.
Fixed vs variable at renewal — the honest framing
Nobody knows where the overnight rate lands in 24 months. The right question isn't which product wins on paper; it's which product you can psychologically stay in for the full term. A borrower who breaks a 5-year fixed in year 3 to catch a better variable pays a Big-Six IRD penalty that wipes out most of the savings.
Two practical rules: (1) if the payment shock is already above 30%, taking on more variability is usually the wrong trade — pick a term you can sleep with; (2) if you're inside 24 months of a life event (baby, job change, moving city), pick a term that ends near the event, not one that traps you inside it.
The moves that save the most on a Canadian renewal
- Shop 120 days out. Your current lender's renewal letter is almost never their best offer.
- Get a broker to run three lenders in parallel. On a $500K balance, 30 bps is $7,500 over 5 years.
- Ask about extending the amortization back out. Available on uninsured files. Cuts payment shock immediately.
- If you have high-interest consumer debt, refinance into the mortgage. A 22% credit card into a 4.79% mortgage is a life-changing spread; make the plan to actually pay the mortgage down faster.
- Time the switch after your renewal date, not before. Breaking early to catch a rate rarely pencils out once the IRD penalty is applied — use the penalty estimator.
- Bump the payment frequency to accelerated bi-weekly. One extra monthly payment per year, no penalty, no negotiation.
Renewal tools & calculators
90 seconds to your risk tier and a tailored short-list of next steps.
OpenPayment shock, rate range, interest over the next term.
OpenFull schedule with extra-payment scenarios.
OpenTotal cost to break — penalty, fees, cashback, and rate-savings break-even.
OpenIRD vs three-month interest — decide whether to break early.
OpenOnly if you're refinancing or extending amortization.
OpenProvince-by-province renewal notes
OSFI's straight-switch rule is federal — it applies the same way in every province. What changes province to province is the paper, the timing, and the second-order costs: notarial closings in Quebec, strata reports in BC, GTA-specific appraisal risk in Ontario, and thinner monoline panels on the Prairies and East Coast.
Ontario
Open the full playbookGTA borrowers face the largest absolute payment shocks in Canada, and FSRA-regulated brokers here have the deepest lender panels. The straight-switch carve-out matters most in Ontario because appraisal risk in specific GTA postal codes is where switches get killed.
No. Ontario LTT (and Toronto's municipal LTT) is triggered by a change of ownership, not a change of lender. A straight switch registers a new mortgage charge on the same title — legal and registration fees only, usually covered by the new lender's switch program.
Yes on most switches. Ontario lenders inheriting a condo file want a current status certificate to confirm reserve fund health and no special assessments. Budget 10–14 days for the condo corp to issue it. This is where GTA condo switches drag past the 120-day window.
British Columbia
Open the full playbookBC's Property Transfer Tax doesn't touch a straight switch, but strata files, leasehold titles, and wildfire-zone insurance binders do. BCFSA-regulated brokers see strata depreciation reports pulled on nearly every Lower Mainland renewal switch.
No. PTT applies to changes of ownership. A same-borrower renewal switch to a new lender only requires new mortgage-charge registration at Land Title — a few hundred dollars, typically covered by the incoming lender's switch program.
The incoming lender wants a recent one — most require it to be dated within the last 3 years. If your strata's report is stale or the contingency reserve is below the lender's threshold, some monolines will decline the switch. Pull the report early.
Property insurance is a condition of any mortgage in Canada. In BC Interior wildfire zones and some Fraser Valley flood zones, binder pricing has spiked or coverage has been declined outright. Confirm the binder BEFORE signing new-lender commitment paper.
Alberta
Open the full playbookNo land transfer tax means renewal switches in Alberta are the cheapest in the country. The friction is income: energy-sector variable pay is averaged over 24 months, and files that leaned on 2022–2023 boom-year bonuses get haircut on the new-lender re-verification.
Yes — Alberta has no provincial land transfer tax. Renewal switches typically cost a few hundred dollars in Land Titles registration fees, plus legal if the incoming lender doesn't cover it. Most switch programs will.
Any lender re-underwriting your file (including your existing lender on a refinance) will average commission, bonus, and overtime across the last 24 months of T4s. Files that funded during a strong year and are renewing in a softer year often see qualifying income drop 15–25%. Straight switches avoid this re-underwrite entirely.
Quebec
Open the full playbookQuebec renewals run on notarial closings, not lawyer closings, and the province's own consumer regulator (AMF) supervises brokers. The mechanics of a straight switch are the same, but the paper trail is French-language by default and the timeline is 3–5 days longer.
No. Quebec's mutation tax is triggered by a transfer of ownership, not a change of lender. A renewal switch is a new hypothec on the same property — notary fees and registration only, typically $900–$1,400.
All Quebec real-estate secured transactions must close through a notary, not a lawyer. Add 3–5 business days for notarial verification and hypothec drafting. Start the switch process 130–140 days out to leave room, not 120.
Yes. OSFI regulates federally chartered lenders regardless of province. Provincial credit unions (Desjardins) and some caisses populaires are supervised by AMF and set their own qualification rules — most now mirror the OSFI change for competitive reasons.
Atlantic Canada & the Prairies
Open the full playbookNova Scotia, New Brunswick, PEI, Newfoundland & Labrador, Saskatchewan, and Manitoba each have their own deed transfer tax rules and provincial insurance quirks — but the renewal mechanics mirror the big four. The single biggest difference is lender panel: fewer monolines lend actively east of Quebec or on the Prairies, so brokered renewal switches are more valuable, not less.
No. Deed transfer tax in the Atlantic provinces is triggered by a change of ownership. Same-borrower renewal switches only pay registration fees and legal — typically under $1,000 total.
Same OSFI straight-switch rules apply. The catch: fewer lenders actively compete on Prairie files, so shopping without a broker often surfaces only 2–3 quotes vs the 5–7 available on an Ontario file. Use a brokered renewal to see the full market.
Manitoba, Saskatchewan, Ontario, and Quebec charge PST on the CMHC premium at funding. That PST doesn't recur at renewal — CMHC insurance travels with the mortgage across renewal switches at no new cost.
Renewal FAQ
When should I start shopping my mortgage renewal in Canada?
Start 120 days before your maturity date. Most lenders will hold a rate for you at that point, and you keep the right to walk if a better offer surfaces. Waiting until the renewal letter arrives (usually 30 days out) is how borrowers accept posted-rate offers 40–70 basis points above market.
Do I have to re-qualify under the stress test at renewal?
No — not if you stay with the same lender, and, since the November 2024 OSFI change, not if you switch lenders on an uninsured straight switch either. The stress test still applies if you refinance (pull equity or change the amortization on an insured file). Full detail in the stress test guide.
How much can I actually save by shopping the renewal?
In our file review, roughly 8 in 10 renewal letters come in 20–60 bps above what a broker can source on the same day. On a $500,000 mortgage over a 5-year term, 40 bps is about $10,000 in interest.
What if I want to break my mortgage before renewal?
You'll owe a prepayment penalty — three months' interest on a variable, or the greater of three months' interest or the IRD on a fixed. Big-Six banks use their inflated posted rate in the IRD formula, which makes fixed penalties much larger than most borrowers expect. Model it in the penalty estimator before you commit.
Should I take a fixed or variable rate at renewal?
There is no universally right answer — it's a bet on where the Bank of Canada goes over your term. Fixed buys certainty; variable is historically cheaper but exposes payment to policy rate changes. A file coming off a 1.99% five-year fixed usually can't emotionally handle another 5-year fixed at today's rates and defaults to shorter terms or variable.
Can I extend my amortization at renewal to lower the payment?
Yes, on uninsured deals. If your file was insured (less than 20% down originally), you're capped at the original amortization schedule. Extending from a 20-year remaining amortization back out to 25 or 30 years is the single largest lever for reducing payment shock, at the cost of more lifetime interest.
What documents do I need for a renewal switch to a new lender?
The same documentation you'd need for a purchase: two most-recent pay stubs, current-year T4 or NOA, mortgage statement, property tax bill, and property insurance. Because uninsured switches now skip the stress test, income adequacy is verified but not stress-tested — you still must show you can service the new payment.
How much does a renewal switch cost?
Between $0 and $800. Most lenders offering a switch bonus will cover the appraisal and legal on standard files. Complex titles (co-op, life estate, matrimonial), non-standard properties (mobile, rural, mixed-use), or missing documents can move it up to $1,200+.
What is payment shock on renewal and how do I measure it?
Payment shock is the % increase from your current payment to your renewal payment. Above ~20% is considered material; above 40% is where lenders start restructuring the file (amortization extension, cash-out debt consolidation, or a term change). Use the renewal calculator to see your exact figure.
Can I refinance and renew at the same time?
Yes — and it's often the cleanest moment to do it. Pulling equity, consolidating higher-rate debt, or breaking a term to catch a better rate all get bundled into one legal transaction. The trade-off: refinancing IS subject to the full stress test, unlike a straight renewal switch.
Your renewal window is short. Use it.
Ninety seconds to run the numbers. If your file grades strong, we route it to a licensed Canadian broker who shops three lenders on the same day — no cost to you, no obligation.