Signing your bank's first renewal offer without shopping it is one of the most expensive habits in homeownership. Here's how the renewal process actually works, what your lender must tell you, and the 120-day playbook for beating the first offer.
The auto-renewal trap — what your bank is counting on
Every mortgage term matures. A federally regulated lender must send you a renewal statement at least 21 days before the term ends1. Many letters include a line like “If you take no action, your mortgage will automatically renew at the rate above for the term selected.” Plenty of borrowers take no action.
That default is profitable for lenders: every basis point accepted above a competitive rate is margin. A few weeks is rarely enough time to compare lenders properly, which is why the playbook below starts months earlier.
The 120-day renewal playbook
At maturity you can move your mortgage to a new lender with no prepayment penalty. The 120 days before maturity is not a federal rule: it's the rate-hold window many lenders offer, which makes it the natural shopping period. Here's what to do, week by week.
Day -120 to -90: Start shopping
Your bank's renewal letter often arrives only a few weeks before maturity (at least 21 days for federally regulated lenders). Don't wait for it. The day you cross the 120-day mark, ask a broker to start benchmarking the market for your file. They'll need your current rate, balance, maturity date, lender, and a basic income picture.
Within 24-48 hours we present 2-3 best-fit lenders with offered rates in writing. You see the comparison before your bank has even drafted their letter.
Day -90 to -60: Lock a rate hold
Many A-lenders hold rates for 90-120 days. When you find one you like, lock it. If rates rise, the hold protects you; if they drop before you fund, we re-shop and capture the lower rate where the lender allows it.
Even if you haven't decided to switch yet, locking a hold gives you a real competing offer in hand when your bank's renewal letter arrives.
Day -60 to -30: Get your bank's letter, benchmark, negotiate
Your bank's letter will usually arrive in this window. Forward it to us. We benchmark it against the held rate and the current market, and show you the difference in dollars over the term.
You now have two options: (a) take our written competing offer to your bank as a retention negotiation, OR (b) accept our offer and switch. We don't push you either way; we present the math.
Day -30 to 0: Sign or switch
If your bank matches the competing offer (it sometimes does), the simplest path is to sign with them: no new paperwork, no switching costs. If it doesn't, we move the mortgage. Many A-lenders cover the discharge fee and appraisal as a switch incentive.
The switch typically takes 7-14 business days. We coordinate with the old lender's discharge desk, the new lender's underwriting, and the lawyer or title-service provider handling the registration.
Staying vs switching — the math + the non-math
Staying with your existing lender is the path of least resistance. No re-qualification, no transfer paperwork, no discharge timing. If your bank matches a competitive market rate, staying is genuinely fine.
Switching unlocks two things staying doesn't: (1) typically a better rate (because the new lender wants your business and is willing to pay for it), and (2) the option to restructure — extend amortization, consolidate debt, take out equity. The cost of switching is mostly paperwork; the financial cost is usually $0 on A-lender transfers.
| Factor | Stay (re-sign) | Switch (transfer) |
|---|---|---|
| Re-qualify under stress test | Usually no | No on a straight switch; yes if adding money |
| Discharge / setup fees | $0 | Often $0 (many new lenders cover them) |
| Appraisal | Not required | Sometimes required |
| Legal cost | $0 | Often $0 on A-lender switches |
| Typical rate vs market | Bank's first offer (often above market) | Best available |
| Restructure (extend amort, take equity) | Limited | Full flexibility |
| Time to close | 1-3 days | 7-14 business days |
Straight switches — no stress test since November 2024
Since November 21, 2024, OSFI no longer expects federally regulated lenders to apply the minimum qualifying rate (the greater of your contract rate + 2% or 5.25%) to an uninsured straight switch at renewal2. Insured mortgages were already exempt on straight switches. The new lender still reviews your credit, income and property, so approval isn't automatic.
A straight switch means the new lender takes the same balance and the same (or shorter) amortization on the same property: a like-for-like move to a new lender. Add money or extend the amortization and it's new lending, so the stress test applies.
Fixed vs variable at renewal in 2026
The fixed vs variable question is harder at renewal than at first purchase because your existing rate is the baseline. If you rode variable through the 2022-2023 hikes, fixed feels safer. If you were fixed and watched variable fall, variable feels smarter. Recency bias matters; the math doesn't care.
Where things stand: the Bank of Canada's policy rate is 2.25% and big-bank prime is 4.45% (as of the September 2, 2026 decision)3. The next scheduled decision is October 28, 2026. Variable rates move with prime; fixed rates follow bond yields. For today's insured and uninsured fixed and variable rates, see our live rate board; we don't quote them here because they change daily.
Choose the payment you can carry if rates move against you, not the one you hope for. Run it both ways with our payment calculator; the decision should fall out of the math, not gut feel.
Renewal vs refinance — when to do which
A renewal rolls your existing balance into a new term at a new rate. Same amortization, same loan size (minus paid-down principal). No equity take-out, no debt consolidation. This is the simplest path.
A refinance restructures the mortgage: a bigger balance (rolling in debt or taking out equity) and often a new amortization, up to 80% of the home's value with a prime lender. More flexibility, slightly more cost, and you must re-qualify under the stress test.
At maturity, you can do either with no breakage penalty. Most renewing borrowers do the simpler renewal because their file hasn't changed. But if you have $20K+ of high-interest debt, or you need home equity for a defined purpose, the refinance path often wins materially. We model both for every renewal file.
Common renewal mistakes Canadian homeowners make
- Signing the renewal letter the day it arrives — that's the first offer, not the best. Always wait. Always shop.
- Calling your bank to negotiate before having a competing offer — the conversation goes nowhere without leverage. Get the broker's written offer first.
- Not considering a refinance scenario — if your file has changed (debt, income, family, equity), a refi can be materially better than a straight renewal.
- Accepting a longer term ‘for stability’: 7- and 10-year terms are usually priced above 5-year terms. Make sure the stability is worth the premium.
- Letting the bank auto-renew without comparing: even with just the 21-day statement in hand, there's room to bring a competing offer. Your lender must disclose the renewal terms in that statement4.
- Forgetting the loyalty rate — if Mortgage Squad Advisors funded your previous mortgage, your Renewal Loyalty Rate is automatic. Mention it.
Your next step
If you're within 120 days of your renewal — or you're within 60 days and your bank's letter is already in hand — the most productive next step is forwarding the letter to us. We benchmark it against 100+ lenders within 24 hours and email you a written comparison. No bureau pull. No commitment.
Beyond 120 days out? Use our renewal comparison calculator to see what you'd save at today's market rates vs your current rate.
Frequently asked questions
Don’t see yours? Ask Maya.
When should I start shopping for a mortgage renewal in Canada?
Will I have to re-qualify under the stress test on renewal?
Are there fees to switch lenders at renewal?
How much can I save by switching lenders at renewal?
Why is my bank's first renewal offer almost never their best?
What if my situation has changed since I last qualified?
Should I go fixed or variable at renewal?
How much does Mortgage Squad Advisors charge for renewal service?
What if I miss the 120-day window?
How long does the renewal process take?
Can I extend my amortization at renewal?
What is the Mortgage Squad Advisors Renewal Loyalty Rate?
Talk to a real Canadian advisor.
No bureau pull to begin. 5-minute pre-qualification. We respond within the next business hour.