Most mortgages take several terms to pay off, so you renew at the end of each one. Renewal is the easiest time to change lenders, the rate or the payment, because there is no prepayment penalty.
The renewal statement
A federally regulated lender, such as a bank, must send your renewal statement at least 21 days before your term ends. It shows the balance, the rate, the payment frequency, the term and any fees, and the offered rate cannot go up before your renewal date. If the lender will not renew, it must tell you at least 21 days before the term ends.
If you do nothing
Your mortgage may renew automatically. The renewal statement has to say so if your lender plans to do this. An automatic renewal may not give you the best rate or conditions, so start comparing a few months before your term ends.
Negotiate before you sign
You can often get a lower rate than the one in your renewal letter. Show your lender the offers you have from others, and be ready to prove them.
Switching lenders
A new lender must approve you under its own criteria. Expect possible costs for discharge, registration, transfer or assignment, and an appraisal. A collateral charge mortgage can cost more to move. If you borrow more or stretch the amortization, a new mortgage insurance premium may apply.
Since November 21, 2024, a federally regulated lender does not have to apply the minimum qualifying rate (the stress test) when you move an uninsured mortgage from another federally regulated lender without increasing the amount or the remaining amortization. Source: OSFI. Lenders still check that you can afford the payments.
Lower payments cost more over time
Extending the amortization at renewal lowers the payment but can add thousands or tens of thousands of dollars of interest. Compare the payment and the interest with the renewal calculator and the amortization schedule. If you are thinking of borrowing more, see the refinance calculator.
Try the mortgage renewal calculator →
Official source
This guide explains general rules. Confirm your figures with your lender, lawyer, or the official source before you act.