Mortgage Renewal in Canada

A renewal can change your payment when the rate, remaining balance, payment frequency, or amortization changes. Estimate your new payment using your actual balance and remaining amortization, then check whether it fits your budget.

The Bank of Canada target rate is one input into borrowing costs, not a mortgage quote. As of September 2, 2026, the Bank held its overnight target at 2.25%; lender offers can differ and change with market conditions. Compare current written offers on the same term, rate type, amortization, and prepayment features.

For mortgages with federally regulated institutions, the lender must provide a renewal statement at least 21 days before the term ends. The statement includes key details such as the balance, rate, payment frequency, term, and applicable charges. Lenders may contact you earlier, but timing and process can vary.

• The renewal notice will include your current mortgage balance, remaining amortization, and one or more rate options (fixed and variable)
• Compare the offered rate with current quotes and review the full contract, including payment frequency, prepayment rights, fees, and renewal terms
• You are not obligated to accept the offer or stay with your current lender
• You have the legal right to switch lenders at renewal without penalty (your term is ending, so there is no early break fee)
• If you do nothing, your mortgage may renew automatically under the terms disclosed by the lender; check what rate, term, and payment would apply

Mortgage offers can differ by lender and borrower. Compare written quotes using the same balance, amortization, term, rate type, and features so you can see the true trade-offs.

1. 1Start 4–6 months early. Give yourself time to shop, compare, and negotiate without pressure.
2. 2Compare offers from your current lender and other lenders or a licensed mortgage broker. Ask how the broker is paid and which lenders are included.
3. 3Check current comparison sources as a starting point, then confirm the rate, eligibility, and conditions directly with the lender.
4. 4Ask your current lender whether it can improve its written offer using any competing quotes you have received.
5. 5Get everything in writing. Verbal rate promises mean nothing — get a rate hold commitment letter with the rate, term, and expiry date.

A fixed rate provides more certainty for the term, while a variable rate can change with the lender's benchmark and contract terms. Choose based on the payment changes your budget can absorb, not a forecast of where rates will go.

The Bank of Canada policy rate does not directly set every mortgage rate. Variable-rate mortgages commonly reference a lender's prime rate, while fixed-rate pricing also responds to bond markets and lender pricing. Check the rate mechanics and payment-change rules in each offer.

A shorter fixed term can reduce how long you are committed to one rate, but it also brings your next renewal sooner. Compare the full cost over the period you expect to keep the mortgage and consider the risk of renewing under different conditions.

A longer amortization can lower the required payment but usually increases total interest and may require lender approval or a new qualification review. Ask the lender to show the payment and total interest under each available option before deciding.

Use the mortgage calculator with your actual balance, offered rate, payment frequency, and remaining amortization. Compare both the payment and total interest, and ask whether extending the amortization changes your qualification or insurance terms.

The maximum amortization and qualification rules depend on the mortgage, lender, and whether the loan is insured. Extending amortization at renewal may be treated differently from a straight renewal. Ask the lender what it requires and confirm current federal rules before relying on a particular term.

If your mortgage contract allows prepayments, paying down principal before renewal can reduce the balance on which future interest is charged. Compare that benefit with your need for emergency savings, other debt costs, and any limits or penalties in the contract.

1. 1Check whether your contract allows a lump-sum payment before renewal, when you can make it, and what limit or charge applies.
2. 2Increase your payment frequency. Switch from monthly to accelerated bi-weekly payments. This effectively adds one extra monthly payment per year, reducing your principal faster.
3. 3Check whether your contract lets you increase regular payments without penalty and whether the higher amount can later be reduced.
4. 4Compare the after-tax return on savings with the mortgage interest you could avoid, while keeping enough liquid savings for emergencies.
5. 5Avoid taking on new debt before renewal. Adding a car loan or increasing credit card balances right before renewal weakens your financial position and limits your options.

You can apply to move your mortgage to a new lender at renewal. The new lender must approve the application, and switching can involve legal, registration, appraisal, or discharge costs. Ask which costs the new lender will cover and get that commitment in writing.

• At maturity, the term-ending prepayment penalty generally no longer applies, but transfer or discharge costs may still apply
• Ask the new lender which legal, appraisal, registration, and discharge costs it will cover
• A straight transfer means you keep the same mortgage balance and amortization schedule — only the rate and lender change
• Some eligible straight switches between federally regulated lenders are exempt from the minimum qualifying rate, but the new lender still assesses the application
• Increasing the balance or extending amortization can change qualification and mortgage-insurance requirements; confirm current rules with the lender

Processing time and paperwork depend on the lender, property, mortgage registration, and whether the application is a straight switch. Start early and ask what documents and appointments will be required.

A renewal continues the mortgage for a new term. Refinancing changes the loan, for example by increasing the balance or changing its structure. Refinancing may let you access home equity, but it requires approval and can add costs and interest.

Before refinancing, compare the total borrowing cost with alternatives and include legal, appraisal, discharge, and lender fees. A lower rate can still cost more if the repayment period is much longer.

6 Months Before Renewal

3–4 Months Before Renewal

When the Renewal Letter Arrives

If Switching Lenders

Official Government Resources