Read This First
Renewal is a negotiation, not a formality
When your term ends, your lender sends a renewal offer, and most homeowners sign it without comparing anything. That inertia costs Ontario borrowers real money every year, because a bank’s first offer is rarely its best rate.
Mortio Financial shops your renewal across 50+ lenders, so you know exactly where your current bank’s number stands before you sign anything.
What is a mortgage renewal?
A renewal happens when your current term - typically one to five years - ends while you still have a balance left on your amortization schedule, the total length of the loan, often 25 or 30 years. Renewing means signing a new term at a new rate. It does not mean your mortgage is paid off.
End of term is not end of amortization
Your term is one segment of a much longer repayment schedule. Renewal simply starts the next segment.
Early offers arrive for a reason
Banks send renewal offers four to six months ahead because they know most customers sign without shopping around.
The choice is entirely yours
You are free to renew with your current lender, switch to a new one, or refinance at renewal.
Your Timeline
The 120-day rule
Everything worth doing at renewal happens in the four months before your term ends. Work backwards from your renewal date.
- 120days
Secure a rate hold
Lock a rate through a broker to protect against increases while you shop. No cost, no obligation - and it becomes your benchmark for every offer that follows.
- 60days
Compare, line by line
Put broker-sourced rates beside your bank's offer and read past the rate. Prepayment privileges, penalty formulas and portability differ enormously.
- 30days
Finalize paperwork
Sign with your chosen lender, or start the transfer if you're switching. Thirty days is enough for a straight switch.
- 0days
Your new term begins
Funds transfer on your renewal date and the new term starts with no interruption to your payment schedule.
Your Options
Three ways to renew, explained
Renew with your current lender
The simplest path - and sometimes the right one.
But only after you have a competing offer in hand. Banks routinely improve their initial number once they know you're comparing rates elsewhere. Use your rate hold as leverage in the conversation, not just as a backup.
Switch to a new lender
A straight switch, at the same balance and amortization.
Your mortgage moves to a new lender with no cash taken out. Because the loan amount doesn't change, these transfers are typically zero-cost - the new lender covers standard legal and appraisal fees to win your business.
Refinance at renewal
The lowest-friction moment to restructure.
Renewal is when you avoid the prepayment penalty that would normally apply mid-term. If you want to access equity, consolidate debt or change your loan structure, timing that change to your renewal date is usually the most cost-effective route.
Qualifying
Do you need to pass the stress test?
It depends on whether you’re switching or refinancing, and whether your mortgage is insured or uninsured.
Straight switch, insured mortgage
No requalificationHomeowners with an insured mortgage can switch to a new lender at renewal without prequalifying under the stress test, provided the balance and amortization stay the same.
Straight switch, uninsured mortgage
Lender dependentSince November 21, 2024, OSFI no longer prescribes the minimum qualifying rate for uninsured straight switches either. Lenders still underwrite the file under Guideline B-20 and set their own qualifying policy, so the rate a given lender uses can still vary.
Refinancing at renewal
Full requalificationAlways requires the full stress test - the higher of your contract rate plus 2% or 5.25% - along with a review of your GDS and TDS ratios, because you're increasing the loan amount or changing the structure.
Changes to your income or credit since your last approval can affect which lenders offer their best rate, even when the stress test itself doesn’t apply.
Costs
What switching lenders actually costs
Straight transfers are typically no-fee to the borrower. The receiving lender absorbs standard legal and appraisal costs as a cost of winning your mortgage. Three exceptions are worth knowing about.
Discharge fee from your outgoing lender
Usually $200 - $400, and not always covered by the new lender. Ask before you sign, not after.
Collateral charge mortgages
Common with several major banks. These are registered differently from standard charges and often cannot be switched without full legal re-registration, meaning legal fees may apply even on a same-balance transfer.
Increasing your loan amount
If you take new money as part of the move, it is a refinance, not a switch. Standard refinance costs apply instead: appraisal, legal, and potentially a penalty.
Not sure which of these applies to you?
Tell us your property use, value and balance and a renewal specialist will confirm exactly what your file will cost to move.
FAQ
Renewal questions we get most
Still stuck on something specific? A renewal specialist will walk through your file with you, at no cost.
When should I start shopping for my mortgage renewal in Ontario?
Start about 120 days before your term ends. That lets you lock a rate hold through a broker while you compare offers, so you are protected if rates rise before your renewal date.
Can my current bank deny my mortgage renewal?
It is uncommon but possible. A lender can decline to renew if your payment history has deteriorated significantly or your file no longer meets their internal risk criteria. Having a broker-sourced backup option protects you either way.
What is the difference between switching lenders and refinancing at renewal?
A switch keeps your balance and amortization the same and moves your mortgage to a new lender, usually at no cost to you. Refinancing increases your loan amount or restructures your mortgage, and requires full stress-test re-qualification.
Will I have to pay fees if I transfer my mortgage to a new lender at renewal?
In most straight-switch cases, no - the new lender covers standard legal and appraisal costs. Exceptions include a discharge fee from your outgoing lender (typically $200 - $400) and the extra legal work required to re-register a collateral charge mortgage.
Do I need to pass the stress test to switch lenders at renewal?
For a straight switch - same balance, same amortization, no new money - you generally do not. Insured mortgages were exempted first, and as of November 21, 2024 OSFI no longer prescribes the minimum qualifying rate for uninsured straight switches either. Lenders still underwrite the file and apply their own qualifying policy, and any refinance still requires full re-qualification.
Related
If a simple renewal isn’t the right fit
Mortgage refinance
Want to access equity or restructure your loan instead of a simple renewal? Renewal is the cheapest moment to do it.
Learn moreSecond mortgage
Need funds without touching your first mortgage's rate? A second mortgage may fit better than a full refinance.
Learn morePrivate mortgage financing
Facing a tighter timeline or credit challenges at renewal? Private financing offers a faster path to approval.
Learn moreDon’t let inertia set your rate
Book a free renewal review. We’ll secure your rate hold and shop your file across 50+lenders, so you know your options before your bank’s offer becomes your only one.
Mortio Financial Corp
Serving Toronto, Mississauga, Markham, Brampton and all of Ontario
