Canadian Mortgage Renewal Guide 2026
Mortgage renewal is the most underused negotiating moment in Canadian home ownership. This guide shows you how to save thousands by approaching renewal strategically.
Most Canadians don't choose a 25-year mortgage — they choose a 5-year mortgage term within a 25-year amortization. When that 5-year term ends, you don't get to keep your old rate. You must renew at the current market rate for the remainder of your amortization.
This matters enormously in 2026. Borrowers who locked in 5-year fixed rates in 2020–2021 at 1.99%–2.49% are now renewing at 3.99%–4.44%. On a $500,000 mortgage with 20 years remaining, that rate jump can mean an additional $650–$1,100 per month in payments. Knowing how to negotiate at renewal — and when to switch lenders — can save you tens of thousands over the new term.
The Renewal Timeline
120 Days Before Maturity
Most major Canadian lenders allow you to lock in a renewal rate up to 120 days early. Get a renewal quote from your existing lender — this is your benchmark, not your target.
90 Days Before Maturity
Start shopping. Contact a mortgage broker (free) and 2–3 other lenders for competing quotes. Brokers have access to dozens of lenders, including credit unions and monoline lenders with sharper rates.
60 Days Before Maturity
Negotiate. Take your best competing offer back to your existing lender. Most banks will match or come within 5–10 basis points to retain you. If they won't, the switch process is straightforward.
30 Days Before Maturity
Sign the renewal documents or, if switching lenders, complete the discharge and registration paperwork. A switch at renewal is typically free — no prepayment penalties apply.
Renewal Day
Your new term begins. If you switched lenders, your new lender pays out the old mortgage and registers the new one. Your monthly payment may change to reflect the new rate.
- 1. Never accept the first renewal offer. The offer your lender mails you is the "posted rate" — typically 0.50%–1.50% above what they'll actually give you if you ask. On a $500,000 mortgage, 0.50% is roughly $2,500/year in interest.
- 2. Get a competing quote first. Even if you intend to stay, get a written offer from a broker or another bank. Saying "I have an offer at X.XX%" is far more effective than saying "can you give me a better rate?"
- 3. Ask about fees, not just rate. Some lenders advertise the lowest rate but make it up on discharge fees, title insurance markups, or restrictive prepayment privileges. Ask for the APR, not just the rate.
- 4. Consider a shorter term if rates are volatile. A 2 or 3-year term gives you flexibility to renegotiate sooner if rates drop, at a small premium versus 5-year fixed.
- 5. Don't extend your amortization unless necessary. Switching from 20 years remaining back to 25 years lowers your monthly payment but adds tens of thousands in interest over the new term.
- 6. Pay down principal at renewal. Renewal is the one time you can make any size lump-sum payment without penalty. Even $5,000 reduces your interest cost meaningfully on a new 5-year term.
- 7. Avoid the "auto-renewal" trap. If you take no action, most Canadian lenders auto-renew your mortgage at their posted rate, often costing you 0.50%–1.50% more than you'd get by asking. Always engage actively.
Switching lenders at renewal carries no prepayment penalty — this is the single biggest negotiating leverage you have. The new lender typically covers the standard discharge fee ($300–$500), legal fees, and registration costs as part of their offer to win your business.
When switching makes sense:
- The rate difference is at least 0.10% (saves ~$500/year on a $500K mortgage)
- You want more flexible prepayment privileges
- Your existing lender refuses to match a competing offer
- You want to consolidate other debts using a refinance at the same time
When staying makes sense:
- Your existing lender matches the best competing offer
- You need to qualify for a higher amount (re-qualification applies when switching)
- Your financial situation has changed and you may not qualify with a new lender's stress test
- The rate difference is under 0.05% and you value the convenience
Important: switching lenders requires re-qualifying at the federal stress test rate (your contract rate + 2%, or 5.25%, whichever is higher). If your income has dropped or your debts have risen, you may not qualify to switch — even if you'd easily qualify for renewal at your existing lender.
Related guides
Compare Live Renewal Rates
See current 5-year fixed and variable rates from all major Canadian banks — updated in real time.