Why renewal is the best money-saving opportunity in your mortgage
When your mortgage term ends (typically every 5 years), you renew at a new rate. Most Canadians:
- Receive a renewal letter from their current lender 4-6 months out
- See a rate they recognize as familiar (often 25-75 bps above the lender's best available rate)
- Sign it without comparing
That last step costs the average borrower thousands. Lenders know that switching feels like work — and price renewal offers accordingly. Switching at renewal is often the single biggest one-time wealth-building opportunity in the mortgage lifecycle.
Your existing lender knows that the cost of switching feels real — paperwork, re-qualification, discharge fees, time. They price your renewal offer assuming you won't bother to leave. Just asking for a better rate often gets one.
When to start (90-120 days before renewal)
The optimal timeline:
- 120 days out: pull your current rate hold + 2-3 broker quotes
- 90 days out: counter your lender with the best quote you've found
- 60 days out: make the switch decision; sign new lender or accept renewal
- 30-45 days out: paperwork phase (new lender, lawyer, discharge)
- Renewal day: clean transition
Starting earlier doesn't help — lender quotes have 90-day expiry. Starting later puts you in a paperwork crunch.
What switching actually requires
Switching from Lender A to Lender B at renewal is essentially a new mortgage with the same property + property tax + you. The process:
1. Re-qualify under the federal stress test
Same-lender renewals SKIP the federal stress test. Switching lenders triggers it. You must qualify at the higher of contract rate + 2% or 5.25%. For most borrowers this is fine — your income probably grew since the original application, and your other debt may have shrunk. But borrowers whose income dropped or whose debt grew need to verify before committing to switch.
2. New appraisal (sometimes)
Some new lenders accept the original appraised value if it's recent. Most require a fresh appraisal at the borrower's cost ($300-$500) or waive it on insured mortgages.
3. New lawyer or title insurer paperwork
Some lenders use title insurance to skip the lawyer entirely for switches (saves $800-$1,500). Others require a full closing with a lawyer.
4. Discharge fee + payoff
Your existing lender charges $200-$400 to discharge their mortgage. The new lender funds and pays off the old lender directly at closing.
5. No prepayment penalty
This is the magic — at renewal (mortgage maturity), you're NOT breaking the mortgage. You're simply not renewing it. No IRD penalty, no 3-month interest charge.
What it costs
Total switching costs typically run $500-$2,000:
- Discharge fee: $200-$400
- Title insurance or new legal: $800-$1,500 (often waived)
- Appraisal: $0-$500 (often waived)
- Possibly: payout statement fee ($50-$100)
Some lenders offer switch-rebate programs that cover all costs — RBC's "Switch and Save", Scotia's similar program, plus most brokers can find a lender willing to absorb costs to win the business.
What it saves — worked example
$440,000 balance at renewal, comparing:
- Lender A renewal offer: 5.34% × 60 months × ~$2,650/mo = $159k total payments
- Best market rate via switching: 4.49% × 60 months × ~$2,440/mo = $146k total payments
- Switching costs: ~$800
- Net 5-year savings: ~$12,200
On larger balances or bigger rate spreads, savings climb above $25,000 over the term.
Run your exact numbers in our renewal comparison calculator.
When NOT to switch
- You're locked into a multi-product relationship (mortgage + investments + business banking) where the bundling provides genuine value
- The rate spread is under 25 bps and your balance is small (savings don't cover switching costs)
- You're in a stress-test borderline situation where re-qualifying might fail
- You expect to sell within 12-18 months (port + blend may be better)
- Your existing lender matches the best quote you found
Lenders that make switching easiest
Based on broker feedback in 2026:
- First National, MCAP, Merix — broker-channel monolines with streamlined switch processes, often title-insurance-only closing
- TD, Scotia — among the big-5, generally cooperative with switch documentation
- BMO — competitive on Smart Fixed even on switches (lower break penalty if you switch again later)
- Manulife One, National Bank All-in-One — readvanceable products that may require restructuring on switch
Negotiating your renewal vs switching
Sometimes the best outcome is to NOT switch — but use the threat of switching to negotiate. Specifically:
- Get the best available rate from a broker (or another lender directly)
- Call your existing lender's mortgage retention team (NOT the renewal letter contact)
- Tell them you have a written quote from Lender B at X%
- Ask them to match — most will go 75-90% of the way
This often saves the switching costs while still capturing most of the rate savings.
Common questions
Will switching lenders affect my credit score?
The credit pull on application drops your score by 5-10 points temporarily. Not material long-term, especially with the savings achieved.
What if my new lender's qualifying ratios are tighter?
Then the switch isn't available to you under that lender. Try another lender — different policies. Brokers have visibility across many lenders simultaneously.
Can I switch from a fixed to a variable mortgage at renewal?
Yes — renewal is the cleanest moment to change product type. No penalty.
Do I keep my amortization?
You can keep, shorten, or extend at renewal — your choice. Most borrowers keep their existing amortization unless cash flow is tight.
What about prepayment privileges?
Reset to whatever the new lender offers. If your old lender allowed 20% / 20% and the new one only allows 10% / 10%, factor that into your decision.
Bottom line
Switching at renewal is the single biggest dollar-saving move available to most mortgage holders. Start 90-120 days out, get 2-3 broker quotes, and either switch or use the quotes to negotiate. Don't sign the first thing your lender sends.
Run the math on your scenario in our renewal comparison calculator. See our renewal 90 days out guide for the broader timeline. For lender-specific renewal questions, our TD, RBC, Scotia and other lender pages walk through the specific renewal mechanics at each major Canadian bank.