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Mortgage Renewal in Canada: What to Know Before You Sign

Most Canadian mortgages have terms of 1 to 5 years, after which the mortgage must be renewed for a new term. Your lender is required to send a renewal offer at least 21 days before your term expires. However, you are not obligated to accept it — and the initial renewal offer is almost always at the posted rate, which is negotiable. Shopping around at renewal is one of the most effective ways to save on your mortgage. An important change since 2024: borrowers switching lenders at renewal no longer need to pass the mortgage stress test, provided they do not increase the loan amount. This policy removes a major barrier to switching.

When deciding whether to stay or switch, compare the total cost over the new term — not just the rate. Switching lenders involves legal and appraisal fees (typically $500–$1,500), but many lenders offer cashback or cover these costs to attract new business. A rate difference of just 0.25% on a $400,000 mortgage saves roughly $1,000 per year, so even small differences add up over a 5-year term. Consider whether a fixed or variable rate best suits your risk tolerance and outlook on interest rates.

Impact of Rate Changes on a $400,000 Mortgage (25-yr amortization)

Start shopping for renewal rates 90 to 120 days before your maturity date. Many lenders and mortgage brokers offer rate holds that lock in a rate for up to 120 days at no cost. If rates drop before closing, you get the lower rate; if they rise, your hold protects you. At renewal, you can also adjust your amortization period, payment frequency, or prepayment privileges. This is an excellent time to accelerate payments or switch to a bi-weekly schedule, which effectively adds one extra monthly payment per year and shaves years off your mortgage.