Renewals are dominating the Canadian mortgage market right now, and a lot of those renewals are coming off terms signed when rates looked very different. If yours is coming up, the most valuable thing you can do before your maturity date is understand what your options actually are, because knowing your options at renewal is what saves you money.
Most people treat a renewal as one decision: fixed or variable, three years or five. Those matter, but they’re rarely the most important part. You have three options, and they differ in what they cost, whether you have to requalify, and how long they take.
Option 1: Renew with your current lender
The simplest option is to renew with the lender you already have, and for a lot of people that’s genuinely the best solution because it’s the easiest. It used to be that banks sent a renewal offer that was really a “we hope you just sign this” offer. That has changed. Many lenders now give existing clients better rates than they’d offer a new customer off the street, because the retention strategy is to hold onto you as long as they can. That works in your favour.
No cost, and no requalifying
A straight renewal costs you nothing and doesn’t require you to requalify. You’re not going back through income verification, credit review, or the stress test. If your income has changed, if you’ve
taken on debt, or if you’re self-employed and this was a lean year, that matters a great deal. This is the one option where none of it gets examined.
The catch
The biggest complaint I hear is that you’re dealing with a bank employee rather than a mortgage broker. Often that person has limited knowledge of mortgage terms and conditions, and their job is to sell the products that one lender offers. Nothing else. So you can end up signing an offer that isn’t wrong, exactly. It just isn’t built around what your family needs over the next few years. Nobody at the branch is asking what’s coming in your life.
Best fit: your situation hasn’t changed, you don’t need to touch your balance or amortization, and the rate and terms hold up against the market.
Option 2: Switch or transfer to a new lender
The second option is to move your mortgage to a different lender. People do this to access a product their current lender doesn’t offer, or terms that are more flexible over the long run. Here’s a real example of why the fine print matters more than the rate.
Blend-and-extend: same feature, very different outcomes
Plenty of lenders advertise a “blend and extend” feature that lets you renegotiate your mortgage early without paying a penalty. It sounds identical from lender to lender. It isn’t. The formula used to calculate that blended rate makes all the difference. Some lenders use a formula so punitive that blending is effectively never worth doing. Others use a much more favourable calculation, which meansyou could take a fixed rate today and still have a realistic option to renegotiate if rates fall.
Think back to 2020, when mortgage rates plummeted to sub-2%. People who had signed in late 2018 or 2019, when rates were hovering above 4%, fell into two camps. Some were locked in because the penalty to break was enormous. Others, whose lender used the favourable calculation, renegotiated down to sub-2% without paying a penalty at all. Same feature on paper, completely different result. And it never comes up in a renewal letter.
Often no cost, but you do requalify
A transfer keeps your balance and amortization as they are. You’re moving the same mortgage to a new home. Because you’re not increasing the loan, a transfer often comes at no cost to you, since most lenders cover the fees to earn your business.
The trade-off is that a transfer does involve requalifying. The new lender doesn’t know you, so they verify your income and review your credit the way they would for any new client.
But here’s a change a lot of people still haven’t heard about. Since November 2024, a straight switch — same balance, same amortization — on an uninsured mortgage no longer has to clear the stress test at a federally regulated lender. That rule used to trap people who could comfortably afford their actual payment but couldn’t qualify two points above it, which left borrowers stuck with a lender who knew they were stuck. Removing it makes switching realistic for a lot more people than it was a couple of years ago.
You still have to qualify. If your income has dropped or your situation has gotten more complicated
since you last qualified, that’s the piece to check before you go shopping for a rate.
Best fit: you don’t need to change your balance or amortization, but you want a better rate, better terms, or features your current lender simply doesn’t have.
Option 3: Refinance
The third option is the interesting one, and it’s where we’re seeing a massive uptick. A refinance opens the entire market to you, and it lets you change the structure of the mortgage itself, not just the rate.
The honest downside is that refinance rates are typically the highest of the three options. They used to be a fair bit higher; they’ve come down and are much closer to standard rates than they were not that long ago. Don’t let that be an automatic deterrent, because a slightly higher rate can save you real money overall.
What a refinance costs and what “free” really means
A refinance is the one option that usually does come at a cost, and for the most part that’s closing costs and an appraisal. You’re registering a new mortgage amount, so the paperwork has to be handled, and the lender needs a current value on the property. Most refinances today close through a title company rather than a lawyer’s office, which is typically faster and less expensive. The signing often happens at your kitchen table or online instead of downtown.
Some lenders absorb those costs; others offer cash back to cover them. Both can make the math work. Just go in clear-eyed, because nothing is really free. Where a lender covers your costs, it’s built into the rate or the terms somewhere. That doesn’t make it a bad deal, and often it’s a very good one. It just means the right comparison is total cost over your term, not whether a fee shows up at closing. A refinance also requires requalifying, on the new and larger balance.
Reason one: consolidating high-interest debt
The cost of living has climbed so much over the last several years that, depending on your life stage, it’s almost inevitable the debt load gets away from you at some point. Hope feels like a strategy in that moment. It isn’t.
You have to look at debt as a whole: unsecured debt, a car loan, a line of credit, a credit card. Then ask one question: what is the cheapest way to borrow the money I owe? Your mortgage is part of that picture, but so is the cost of financing everything else. Once you add it up, rolling it together is often genuinely cheaper, even at a slightly higher mortgage rate.
Reason two: cash flow
The second reason has nothing to do with debt. Say you started your term five years ago on a 25-year amortization. If you haven’t made extra payments you have roughly 20 years left, and because rates are higher than they were, your payment at renewal is very likely going up. So a lot of people are refinancing to bring the payment back to what they’ve been used to paying, or lower than what they’re paying now.
That extra room can go anywhere:
• Into investments, like a TFSA or RRSP. Worth a conversation with your financial planner before
your renewal.
• Toward upcoming expenses you can already see on the horizon.
• Toward simply lowering payments as you approach retirement, which is a very common goal.
Best fit: you need to change something structural: consolidate debt, access your home equity, or reset your payment to fit your budget.
Cost, qualifying, and timing: the quick comparison
Rate gets all the attention, but three other things separate these options:
• Renew with your current lender: no cost, no requalifying, and it can be done quickly.
• Switch or transfer: often no cost, but you do requalify, and it takes time to process.
• Refinance: usually a cost (closing costs and an appraisal, most often through a title company), you requalify on the new amount, and it takes time to process.
The amortization myth that stops people cold
The most common objection I hear when we bring up refinancing to extend the amortization is this: “I don’t want to take 30 years to pay off my mortgage.”
Here’s the thing. Your amortization doesn’t mean you have to take that long to pay off your mortgage. It means you have that long available to you if you need it.
You might extend your amortization today and still shorten it drastically later by making extra payments. Or, if that freed-up cash flow is invested and those investments grow enough to pay the mortgage off in full, you could be mortgage-free considerably sooner than if you’d kept chipping away and never invested at all. That isn’t the right answer for everybody, and it’s absolutely a conversation to have with your financial advisor. But the fear of a longer amortization stops people from even looking at an option that might serve them better.
Start earlier than you think: timing is the trap
Most lenders start reaching out around 120 days before your renewal date, and most will let you hold a rate for 120 days. But holding a rate isn’t the same as having time to use it.
Here’s the part people underestimate. A transfer or a refinance typically takes upward of 60 days from start to finish. There’s an application, underwriting, an appraisal in some cases, a payout request to your existing lender, and the closing itself. None of it moves as fast as you’d like.
So if your maturity date is coming up in less time than that and you want to switch lenders or refinance, you may not have the runway. In that case the fallback is to renew into an open term with your existing lender. That keeps you flexible and lets you finish the move properly instead of being forced into a rushed decision. An open term generally carries a higher rate while you’re in it, so it’s a bridge, not a destination.
All of that is avoidable. The best time to reach out about your mortgage renewal is four to six months before your maturity date. That gives you room to compare, room to hold a rate, and room to decide on your timeline instead of under a deadline. If your bank has already sent you a renewal letter, that’s not a deadline; that’s your starting point.
What actually matters at renewal
You have a mortgage term, and it has to be renewed. Three years, four, or five. Fixed or variable. Most people think those are the most important factors. They’re important, but they’re seldom the most important.
The better question is what the next three to five years look like for your family. Are you moving? Renovating? Sending a kid to school? Changing careers? Approaching retirement? Plan around that, so your mortgage plan matches your financial plan. Your mortgage is a big part of that plan, but paying it off is seldom anyone’s entire plan. Knowing which option makes the most sense for you isn’t a decision to make in a bubble.
Mortgage renewal FAQ
What happens at mortgage renewal?
Your term ends and the balance remaining on your mortgage has to be placed into a new term. Your lender will send you an offer, usually around 120 days before your maturity date. You can accept it, move your mortgage to a different lender, or refinance. If you do nothing, most lenders will roll you into a term automatically, often not the one you would have chosen.
Do I have to requalify to renew my mortgage?
Not if you renew with your current lender. A straight renewal doesn’t require income verification, a credit review, or the stress test. If you switch lenders you do requalify on income and credit, but since November 2024 a straight switch on an uninsured mortgage no longer has to pass the stress test, which makes moving far more achievable than it used to be. A refinance requires full requalifying, on the new balance.
Should I switch lenders at renewal?
It depends on what you’re after. Switching makes sense if another lender has a better rate, more flexible terms, or a feature yours doesn’t offer. A transfer often costs you nothing, because most
lenders cover the fees. The trade-off is requalifying, so it’s worth checking that first.
Can I refinance at renewal?
Yes, and renewal is one of the most natural times to do it. A refinance lets you change the mortgage amount and amortization, not just the rate, which is how people consolidate debt, access home equity, or lower their payment. It comes with closing costs and an appraisal, and you requalify on the new balance.
How long does a mortgage transfer or refinance take?
Typically upward of 60 days from start to finish. If your renewal is closer than that, you may need to renew into an open term with your current lender to buy the time to complete the move.
Should I just sign the renewal my bank sent me?
Not before you compare it. Bank renewal offers have gotten more competitive, so it may well be a good offer, but you won’t know until you’ve seen what else is out there. A second opinion costs you nothing and takes very little time.
Let’s look at your options together
Whether the right move is renewing with your current lender, switching to a new one, or refinancing, the goal is the same: a mortgage that fits the next five years of your life, not just the next rate cycle.
Contact our team today and we’re happy to walk through your options with you, or complete our renewal intake form and we’ll come back to you with what makes the most sense for your situation.
