How far in advance should I start shopping my mortgage renewal?

Start shopping your mortgage renewal 4–6 months before your maturity date. This gives you enough time to get competing quotes from brokers, negotiate with your existing lender, and complete a switch to a new lender if needed (which typically takes 3–4 weeks of paperwork). Most lenders will allow you to lock in a rate 4 months before renewal without paying a penalty.

Do I have to pass the stress test when renewing my mortgage?

No — since 2023, if you renew your mortgage with your existing lender, you do not have to pass the federal mortgage stress test again. This rule was changed to help borrowers who took on mortgages at ultra-low rates in 2020–2021. However, if you switch lenders at renewal, the new lender must stress test you at your contract rate plus 2% or 5.25%, whichever is higher.

Can I switch lenders at renewal without a penalty?

Yes — there is no prepayment penalty for switching lenders at your mortgage maturity date. A penalty only applies if you break your mortgage before the term ends. At renewal, you are free to switch to any lender without cost. The new lender typically covers discharge and assignment fees (up to $1,000) to earn your business.

What is the difference between a mortgage renewal and a refinance?

A renewal happens at your natural term maturity — your mortgage comes to the end of its term and you negotiate new terms (rate, term length) for the next period. No penalty, no stress test with same lender. A refinance happens mid-term — you break your existing mortgage early to change the amount, rate, amortization, or lender. Refinancing incurs a prepayment penalty (often $10,000–$30,000 for fixed rate) and requires a new stress test.

What are the best mortgage renewal rates in Canada right now?

The best renewal rates in Canada are available through licensed mortgage brokers who have access to 50+ lenders competing for your business. Current best broker rates for a 5-year fixed are around 4.04% (insured) and variable rates around 3.50%. Your bank's first renewal offer is almost always 0.3–0.8% higher than what they'll actually accept if you push back.

Should I renew early or wait until my term ends?

Renewing early means breaking your mortgage mid-term, which triggers a prepayment penalty — often $10,000–$30,000 for a fixed rate. To know if early renewal makes sense, calculate: penalty cost ÷ monthly savings at the new rate = months to break even. If you'll stay in the home longer than the break-even period, it may be worthwhile. Most lenders allow rate holds 3–4 months before renewal at no cost — use this window to lock in a good rate without breaking.

Renewal

Mortgage Renewal Canada — Your Bank's First Offer is Almost Never Their Best

Last updated: July 2026·8 min read

$400 billion in Canadian mortgages are renewing in 2026.

Most borrowers will simply sign what their bank sends. That's a costly mistake — and this guide explains exactly what to do instead.

Mortgage renewal is one of the most significant financial events in a homeowner's life — yet most Canadians treat it like a routine form renewal. The average Canadian spends more time comparing streaming subscriptions than comparing mortgage renewal offers. Given that a 0.5% difference on a $400,000 mortgage is worth $2,000 per year — $10,000 over a 5-year term — this is worth your attention.

What Happens at Mortgage Renewal?

When your mortgage term ends (typically every 5 years), your mortgage comes up for renewal. Your lender is legally required to notify you at least 21 days before maturity — though most send a renewal letter 4–6 months early. At renewal, you have three options:

Option: Accept

Sign the renewal letter as-is. The path of least resistance — and almost always the worst financially.

Option: Negotiate

Call your lender, ask for a better rate, use competing offers as leverage. Works more often than people think.

Option: Switch

Move to a different lender entirely. No penalty, no stress test restriction (with same lender). Often the best rate.

Key Rule Change (2023)

Since 2023, you do NOT need to pass the mortgage stress test when renewing with your existing lender — even if you're switching from a variable to fixed rate. If you switch to a new lender at renewal, the new lender must stress test you. This rule gives your existing lender some leverage — but a broker can tell you whether the rate difference justifies switching.

Why Your Bank's Renewal Letter Isn't Their Best Rate

Banks know something important about mortgage renewal: the vast majority of borrowers will renew with their existing lender simply because it's convenient. Industry data suggests 60–70% of Canadians renew without shopping. Banks price their renewal letters with this inertia in mind.

The renewal letter rate you receive is typically their "posted" renewal rate — not the rate they would offer a new borrower, and certainly not what they'll accept if you push back. Banks have mortgage retention teams whose entire job is to keep your business when you threaten to leave.

Real Example: The Cost of Accepting the First Offer

Mortgage balance$400,000

Bank's first renewal offer5.39%

Negotiated rate (with broker quote as leverage)4.89%

Annual savings~$2,000

5-year savings~$10,000

Renewal Savings Calculator

Enter your balance and the rates you've been offered to see exactly what shopping your renewal is worth.

Renewal Savings Calculator

See how much you could save by shopping your renewal instead of signing what your bank sends.

Current Mortgage Balance

Remaining Amortization (years)

Bank's Renewal Offer (%)

Best Broker Rate (%)

Pre-filled with current best broker rate

Bank Renewal Payment

$2,713/mo

At 5.39%

Broker Rate Payment

$2,605/mo

At 4.89%

5-Year Savings

$6,515

$1,303/year

This $6,515 difference is worth a 10-minute call.

Get a Broker Renewal Quote — Free, No Obligation →

The Renewal Timeline — What to Do and When

5–6 months before

Start shopping rates

Contact a mortgage broker and start comparing current market rates. This is when you have the most leverage.

3–4 months before

Get broker quotes in writing

Get a written rate hold from a broker. Use this as your negotiating baseline with your existing lender. This is your strongest leverage point.

2–3 months before

Negotiate with current lender

Call your bank's mortgage retention team (not a branch — ask specifically for retention). Present the competing offer and ask them to match or beat it.

6 weeks before

Initiate switch if needed

If your bank won't move enough, begin the lender switch paperwork. Most switches take 3–4 weeks. Don't leave this too late.

Maturity date

Sign and close

Confirm your new rate, term, and payment amount. Verify everything in writing before the maturity date.

How to Negotiate a Better Renewal Rate — Script Included

Most people have never negotiated a mortgage renewal because they don't know it's possible. Here's exactly how to do it:

Word-for-Word Script

"Hi, I've received your renewal offer of [X]%. I've been shopping around and have a competing offer of [broker rate]% from another lender. I'd like to stay with [Bank Name] if you can match or get close to that rate. Can you transfer me to your mortgage retention team?"

✓ Ask specifically for the Retention Team

Branch mortgage advisors typically can't offer below a certain floor. The retention team has authority to discount significantly to keep your business.

✓ Have a real competing offer

Your leverage depends on having an actual competing quote. A broker can provide this in writing — for free. Lenders know empty threats when they hear them.

✓ Be prepared to actually switch

If your bank won't move, you need to be willing to follow through. The moment they believe you'll stay regardless, their motivation to discount disappears.

✓ Negotiate rate AND terms

Beyond rate, ask about: prepayment privileges (can you pay down 10–20% extra per year?), portability (can you take this mortgage to a new property?), and blending options if you may need to refinance.

When to Switch Lenders at Renewal

Switching lenders at renewal is simpler than most Canadians think. At maturity, there's no penalty — you simply notify your existing lender you won't be renewing and complete a new application with your new lender. The new lender handles the transfer.

Switch if:

✓Rate difference is 0.2%+ (worth the effort)
✓Better prepayment privileges elsewhere
✓Poor service experience with current lender
✓Switching to variable from fixed (or vice versa)

Stay if:

—Current lender matched best market rate
—You value the existing banking relationship
—You may need to refinance mid-term (easier with existing lender)

A licensed mortgage broker does the comparison work for you — at no cost.

Fixed vs Variable at Renewal

Don't assume you should take the same type of mortgage you had before. Your situation may have changed — and the rate environment in 2026 is different from when you last renewed.

With the Bank of Canada holding rates at 2.25% in 2026, variable rates are currently around 5.45% while fixed rates are around 4.89%. If you had a fixed rate that's now maturing, you're renewing into a lower-rate environment — and variable may make more sense than it did 5 years ago.

Read our full breakdown: Fixed vs Variable in 2026 — Which is Better? →

If You Locked in at Low Rates — Prepare for Renewal Shock

A large cohort of Canadians locked in 5-year fixed mortgages at 2.0–2.5% in 2020–2022. If that's you, your renewal is coming — and the payment difference will be significant. On a $500,000 mortgage:

Old Rate (2020)

2.2%

≈ $2,170/month

Renewal Rate (2026)

4.89%

≈ $2,690/month

That's approximately $520/month more — $6,240 per year. Strategies to reduce renewal shock:

→Make lump sum prepayments before renewal to reduce your outstanding balance
→Extend your amortization at renewal if eligible (increases mortgage term, reduces payment)
→Consider a variable rate if you believe rates will continue to fall
→Shop aggressively — every 0.1% difference matters more on a larger payment

Renewal timing matters differently in each market. In Calgary's recovering market, locking in early protects against rate rises. In Vancouver and Toronto, borrowers who locked in at 2020–2021 rates face significant payment increases at renewal. In Ottawa, the government employee base means many buyers have stable incomes to absorb renewal shocks.

Get Your Best Renewal Rate

A licensed broker will shop your renewal across 50+ lenders and give you a competing offer you can use to negotiate with your existing bank — or simply take the best rate available. Free, no credit check.