Mortgage renewal in Canada: a step-by-step guide
Your mortgage term ends long before the mortgage is paid off, so most Canadians renew several times. Renewal is the one moment you can change lenders, rates, payment size and amortization without a penalty. Here is how to use it.
1. Know your dates (start about four months out)
Many lenders can hold a rate for about 120 days, so begin comparing roughly four months before your term ends. Federally regulated lenders, such as banks, must send a renewal statement at least 21 days before the term ends, or tell you 21 days ahead if they will not renew. Don’t wait for that letter to start shopping. Source: FCAC
2. Read the renewal statement
It must show the remaining balance, interest rate, payment frequency, term and any charges or fees, and say whether the lender will renew automatically if you do nothing. Automatic renewal is convenient, but it may not give you the best rate.
3. Work out your new payment
Enter your balance, remaining amortization and the quoted rate in the mortgage renewal calculator. As an example, a $500,000 mortgage taken at 2.5% in 2020 has about $423,190 left after five years; renewing at 4% raises the monthly payment by roughly $317.
4. Compare offers and negotiate
- Ask your current lender for its best rate, not just the posted renewal offer. Competing quotes help.
- Get quotes from at least two other lenders or a mortgage broker.
- Compare the same term and rate type (for example, 5-year fixed against 5-year fixed).
5. Decide whether to switch lenders
Since November 21, 2024, borrowers whose mortgage is with a federally regulated lender no longer need to pass the stress test to make a straight switch at renewal, meaning the amount and amortization stay the same. The new lender still approves you at your contract rate. Source: Ratehub
Switching can involve discharge, registration, transfer or appraisal fees, so ask the new lender whether it covers them. A collateral-charge mortgage can be harder to move. If your mortgage is insured, give the new lender your insurance certificate number so you don’t pay the premium twice.
6. Choose how to handle a higher payment
| Option | Effect on payment | Effect on total cost |
|---|---|---|
| Lump-sum payment at renewal | Lower | Lower |
| Shorter or longer term | Depends on rate | Depends on future rates |
| Accelerated bi-weekly payments | Slightly higher per month | Lower |
| Extend the amortization | Lower | Higher, often by a lot |
Model a lump sum with the prepayment calculator and an extension with the amortization extension calculator. FCAC advises thinking twice before extending, because it can add thousands or tens of thousands of dollars in interest.
7. Sign before the maturity date
Return the signed renewal or complete the switch before your term ends. If you miss it, the mortgage may renew automatically on the lender’s terms, or roll into a short open term at a higher rate.
Why this matters now
The Bank of Canada estimated that about 60% of outstanding mortgages renew by the end of 2026 and that roughly 40% of all mortgages renew at a higher rate than before. Source: Advisor.ca · TD Economics
Try the calculators
- Mortgage renewal payment calculator
- Mortgage payment calculator (Canada)
- Extend amortization calculator
- Mortgage prepayment calculator
This guide is general information, not financial advice. Confirm rates, fees and privileges with your lender or a licensed mortgage professional.
Reviewed October 2026 · How we build our calculators · Report an issue