This article is for informational purposes only and does not constitute financial advice. Speak with a licensed mortgage professional before making any mortgage decisions.
Quick Answer
- In most cases, uninsured Canadian borrowers can switch mortgage lenders at renewal without repeating the OSFI B-20 stress test, as long as the loan amount and remaining amortization stay the same.
- This straight-switch exemption took effect on November 21, 2024, and applies to switches between federally regulated lenders.
- Insured mortgages (originally backed by CMHC, Sagen, or Canada Guaranty) have always been exempt from re-qualification at renewal.
- The stress test — the greater of contract rate plus 2% or 5.25% — still applies if you increase the loan amount, extend the amortization, or refinance.
- For most homeowners, shopping around at renewal now costs little and often saves several thousand dollars over the term.
Why This Question Matters in 2026
Roughly 1.2 million Canadian mortgages are set to renew in 2026, and many of those homeowners first locked their rates during the ultra-low period of 2020 and 2021. If that describes you, the renewal offer that arrives in the mail from your bank probably looks nothing like the rate you signed five years ago — and it may not be the best rate available to you today.
Reddit threads on r/PersonalFinanceCanada now fill up weekly with the same question: should I just sign what my bank sent me, or is it worth shopping around? The answer changed in a meaningful way in late 2024, when the Office of the Superintendent of Financial Institutions (OSFI) quietly removed a rule that had trapped many homeowners at their existing lender. Understanding that change — and what it did and didn’t do — is the difference between an easy signature and a smarter decision. For context on how much payments can jump at renewal, see our overview on renewal payment shock.
Quick Start: Pick Your Path
Accept the bank’s offer if it is within 0.10% of the lowest rates advertised at similar lenders and you value simplicity above marginal savings.
Negotiate with the bank if the offer is 0.15% to 0.30% higher than what you can find elsewhere. Call, ask for a match, and put a competing quote in writing.
Switch to a new lender if the gap is wider than 0.30% or your bank refuses to move. A broker typically closes this in 10 to 15 business days.
To get a written rate you can hold against any offer, start an instant pre-approval — it takes only a few minutes and doesn’t affect your credit score.
Renew With Your Bank: What You Actually Get
Your renewal letter typically arrives 30 to 120 days before your term ends. It shows the bank’s posted rate — the sticker price the bank publishes — and often a small discount off that posted rate. In most cases, that discounted number is still noticeably higher than what the same bank would offer a new customer walking in cold, and it is almost always higher than what a broker can access from a wider pool of lenders.
Big-Six banks count on inertia. If you sign the renewal letter without asking, you have agreed to their opening offer. If you do nothing at all, most banks will auto-renew you at the posted rate — the highest number on the page — which can add thousands of dollars in interest over the new term. This is the single most expensive mistake a homeowner can make at renewal.
Staying with your bank is not wrong. There is real value in avoiding paperwork, keeping your existing pre-authorized payment setup, and continuing a banking relationship you already trust. The point is that you should stay by choice after comparing options, not by default because a letter arrived. For a full walkthrough of how renewals actually work, see our complete guide to mortgage renewals.
Switch Lenders at Renewal: What Changed in November 2024
Before this change, switching required passing the OSFI B-20 stress test — the greater of contract rate plus 2% or 5.25% — even if you were only moving your existing balance. That rule locked people into their current bank whenever their circumstances (income, credit, debt) had changed since they first qualified.
The exemption does not cover everything. If you increase the loan amount, extend the amortization, or convert to a different product like a HELOC, the stress test still applies. Insured borrowers — those whose mortgages are backed by CMHC, Sagen, or Canada Guaranty — have always been exempt from re-qualification at renewal, so this change doesn’t affect them. For a deeper explanation of the policy itself, see OSFI’s straight-switch rule change.
Bank Renewal vs Switching: Side-by-Side
The tradeoffs between renewing with your bank and switching to a new lender line up on a small handful of dimensions: rate, qualification burden, out-of-pocket cost, and speed. A side-by-side view helps most people see which option fits their situation.
The single biggest driver is the rate gap. On a $400,000 mortgage with 25 years remaining, a 0.25% rate improvement translates to roughly $500 per year in interest savings, or about $2,500 over a five-year term — enough to easily cover the typical costs of switching. On a $700,000 mortgage, the same 0.25% is closer to $4,400 over five years. The larger your balance, the smaller the rate difference needs to be for switching to pay off.
The second driver is qualification. If your income has dropped since you first got your mortgage, if you’ve taken on new debt, or if you’re self-employed and your reported income varies, the straight-switch exemption is a genuine gift — you can still access competitive rates from other lenders without proving you’d qualify all over again. To see current benchmark rates in the market, visit our current rate details page.
The Real Cost of Switching (and When It Pays Off)
The main fees to expect are the discharge fee from your existing lender (typically $250 to $400 — this is the fee to release your mortgage), the legal or title-transfer fee from the new lender (often waived or covered by lender cash-back), and sometimes an appraisal ($300 to $500). Insured switches can proceed without a fresh appraisal in many cases; uninsured switches usually need one.
To compute your own break-even, take the difference between your bank’s offered rate and the switching rate, multiply by your outstanding balance, and see how many months it takes to exceed your switching costs. Anything under 12 months is a strong signal to switch. Our mortgage refinance calculator can help you run these numbers with your own balance and term. Illustrative only — not a forecast.
Step-by-Step: How to Shop Your Renewal in 30 Days
The Canadian renewal process has a built-in 120-day window before your term ends. Most lenders will lock a rate for you during this window, which means you can start shopping four months out and use those quotes to negotiate — or to move.
- 1Day 120 — Read the letter, do not signYour bank’s renewal offer typically arrives. Note the offered rate and any privileges (pre-payment options, portability). Most rate holds start at this point and remain valid for 90 to 120 days.
- 2Day 90 — Get two or three competing quotesA mortgage broker can gather these in a single conversation, since brokers work with dozens of lenders including banks, credit unions, trust companies, and monoline lenders. Independent brokers are paid by the lender you choose, so their service is free to you. Read why work with a broker.
- 3Day 60 — Take the best quote back to your bankAsk them to match. Many banks will reduce their offer by 0.15% to 0.30% at this stage if you have a written competing quote in hand. If they match, decide whether the convenience of staying outweighs any remaining gap.
- 4Day 30 — Sign the new lender’s paperworkIf you are switching, sign the new lender’s paperwork. Legal transfers usually complete in 10 to 15 business days, well before your maturity date.
Common Mistakes at Renewal
Most costly renewal decisions come from a small set of predictable mistakes. Watch for these:
- ▪Auto-signing the renewal letter. You are almost never getting the best rate the bank can offer. Ask, negotiate, or shop before you sign.
- ▪Chasing the lowest rate only. A rate 0.10% lower with restrictive pre-payment terms can cost more than a slightly higher rate with flexible privileges. Compare the whole product, not just the number.
- ▪Extending your amortization by default. Some renewal offers quietly reset your amortization to 25 or 30 years to lower your monthly payment. That lowers your payment but adds tens of thousands in interest over the life of the loan.
- ▪Missing the 120-day rate-hold window. Waiting until the last two weeks limits your leverage and your options.
- ▪Forgetting pre-payment privileges. If you plan to make lump-sum payments during the term, confirm the new lender’s rules match your habits.
- ▪Assuming the process is the same in Quebec. Quebec renewals often require notarial involvement, which adds time — see our note on what happens if renewal is denied for edge cases.
- ▪Confusing renewal with refinance. They are different transactions with different rules and different costs.
Frequently Asked Questions
Can I switch mortgage lenders at renewal without taking the stress test?
Is my bank’s renewal offer usually the best rate I can get?
How much does it cost to switch mortgage lenders in Canada?
What is a straight switch mortgage and do I qualify?
How many days before renewal should I start shopping?
What happens if I do nothing and let my mortgage auto-renew?
Is switching worth it for a rate improvement of only 0.20%?
Do I have to pay a penalty if I switch at renewal?
Can a mortgage broker really get me a better rate than my bank?
Is the process different in Quebec?
For more, see our full mortgage FAQ.
Talk to a broker before you sign
The decision between renewing with your bank and switching lenders now hinges on a straightforward comparison of rates, fees, and product features. That comparison usually takes less than an hour and can save several thousand dollars over your next term. Razi Khan, Founder and Mortgage Broker at Pegasus, and his team shop 50-plus lenders on your behalf at no cost to you.
Get your instant pre-approval →
About the author
Razi Khan
Founder, CEO & Licensed Mortgage Broker · Pegasus Mortgage Lending · Toronto, Ontario · FSRA Lic # 11479
Razi Khan is the Founder, CEO, and a licensed Mortgage Broker at Pegasus Mortgage Lending Center Inc., based in Toronto. With over 20 years of experience in the Canadian mortgage industry, Razi has personally guided more than 3,000 clients through some of the most complex and high-stakes financial decisions of their lives — from first-time purchases in the GTA to refinancing strategies, alternative lending solutions, and cross-border mortgages for Canadians buying in the United States.
Razi founded Pegasus in October 2008, launching the brokerage at the height of a global financial crisis. He works across the full spectrum of borrower profiles, with particular expertise in complex files including self-employed borrowers, credit-challenged clients, and investors building multi-property portfolios.
Learn more about Razi Khan →Sources & References
- OSFI — Guideline B-20: Residential Mortgage Underwriting Practices and Procedures — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-b-20
- OSFI — Removal of the Minimum Qualifying Rate for straight switches (November 2024) — https://www.osfi-bsif.gc.ca/en/news/media-advisories-statements
- Financial Consumer Agency of Canada (FCAC) — Renewing your mortgage — https://www.canada.ca/en/financial-consumer-agency/services/mortgages/renewing-mortgage.html
- CMHC — Mortgage Loan Insurance overview — https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance-for-consumers
- Sagen — Mortgage default insurance overview — https://www.sagen.ca/
- Canada Guaranty — Homeowner mortgage insurance — https://www.canadaguaranty.ca/
- Bank of Canada — Financial System Review — https://www.bankofcanada.ca/publications/fsr/
- FSRA (Ontario) — Mortgage brokering — https://www.fsrao.ca/industry/mortgage-brokering