Mortgage renewal in Canada: should you stay with your bank or shop?
Renewal is the single best moment to re-price your mortgage. There is no penalty (your term has ended), no stress test if you stay with the same lender on a straight switch, and the entire industry is bidding for your business. Most Canadians leave money on the table here because they accept the first letter from their bank without negotiating.
The renewal letter is an opening offer, not a final one
Banks send renewal letters 30–120 days before maturity with a posted-or-near-posted rate. The discount they’re willing to apply if you push back is often 1–1.5 percentage points below that letter. Your leverage:
- A written quote from a competitor (broker or another bank).
- A mention that you’ll switch lenders if the rate isn’t competitive.
- Patience — most lenders sharpen the offer in the final 30 days before maturity.
Treat the letter as a starting point. Email or call your branch with a competing quote attached and ask them to match. They almost always will, partway. Then decide whether the matched rate is good enough to stay or whether the competitor is worth the small switching effort.
Switching at renewal is cheaper than people assume
If you switch to a new lender at renewal:
- No penalty — your old term has ended.
- The new lender typically covers discharge fees, legal/title transfer, and appraisal as part of the offer (always confirm in writing). Net switching cost is often $0.
- No new stress test if you stay with a federally regulated lender on a straight switch (no top-up, no amortization extension) — this rule changed in late 2024 to remove the stress-test barrier to renewal shopping.
- Same lender, same property, same balance — what changes is the rate.
The friction is paperwork, not money. Two evenings of effort can save $5,000–$15,000 over a five-year term on a typical mortgage.
When staying is the right call
- Your bank actually matches the best market rate.
- You have a complex financial setup (HELOC, readvanceable, multiple cross-collateralized properties) that makes the switch genuinely painful.
- You’re within a year of paying it off — switching costs eat the savings.
Otherwise, shop. The “loyalty discount” is a story banks tell themselves, not you.
Timing
Start gathering quotes 90–120 days out. Many lenders will guarantee you a rate that far ahead — if rates rise, you keep the lower one; if they fall, you can renegotiate. Lock in the floor and watch.