Mortgage renewal in Ontario: should you stay with your lender or switch?
Last reviewed October 2026 · General information, not legal advice
Most homeowners renew with their existing lender by signing the letter that arrives in the mail. That is often the most expensive choice. Renewal is the one point in your mortgage when you can move to any lender with no penalty, and lenders price their first offer knowing most people won't check.
Start four months before your term ends
Many lenders will hold a rate for around 120 days. Starting early gives you time to compare offers, and a held rate protects you if rates rise before your renewal date. If rates fall instead, most lenders will give you the lower rate at funding.
Your current lender has to send a renewal statement before the term ends. Don't wait for it. If you ignore the renewal, some lenders automatically roll the mortgage into a new term, sometimes a short one at a posted rate.
Step 1: Know your numbers
- Your balance on the renewal date (on your annual statement or online banking).
- Years left on your amortization.
- Your lender's renewal offer, in writing.
Then get two or three quotes for the same term from other lenders or a mortgage broker. Put the numbers into the renewal calculator to see the saving after costs.
Step 2: Negotiate with your current lender
Lenders keep a retention rate for customers who are about to leave. Call, tell them the rate you have been offered elsewhere, and ask them to match it. Many will, which saves you the paperwork of switching.
Step 3: Switch if the numbers say so
A straight switch moves the same balance and amortization to a new lender. Since November 21, 2024, federally regulated lenders no longer apply the mortgage stress test to uninsured straight switches at renewal. Insured mortgages were already exempt. If you add money or extend the amortization, it becomes a refinance and normal qualifying rules apply.
Costs to expect when switching:
| Cost | Who usually pays |
|---|---|
| Legal fees to register the new mortgage | Often covered by the new lender |
| Appraisal | Often covered or waived |
| Discharge fee from your current lender | Usually you, sometimes reimbursed |
Ask the new lender in writing which costs they will cover before you commit.
What about breaking early?
If rates drop mid-term, breaking your mortgage to get the lower rate only works when the interest saved is larger than the penalty. Variable-rate mortgages usually charge three months' interest, which is often worth paying. Fixed-rate mortgages at the big banks usually charge the interest rate differential, which can run to tens of thousands of dollars. Get the exact penalty from your lender, check it with the prepayment penalty calculator, then use the Break early option in the renewal calculator.
Two alternatives to breaking:
- Blend and extend: your lender blends your current rate with today's rate and extends the term, with no penalty charged up front.
- Use prepayment privileges: paying down the balance with your annual lump-sum allowance reduces the interest and the penalty.
If you are behind on payments
A lender can refuse to renew a mortgage that is in arrears, and other lenders may decline the switch. Deal with arrears before the term ends. Our guide on how to stop a power of sale explains your options, including reinstating the mortgage.
This is general information. Every mortgage and every file is different. Speak to an Ontario lawyer or licensed paralegal about your situation before you act.