Mortgage Renewals in Ontario
Your renewal letter is not your best offer. Here's how to renew strategically in Ontario.
What a mortgage renewal actually is
A mortgage renewal happens at the end of your current term — typically every 3 or 5 years in Canada. Your loan balance carries over, but you choose a new term, rate type, and amortization. Most Ontario homeowners simply sign the lender's renewal letter and re-commit for another term at whatever rate their bank decided to offer. That single decision can cost tens of thousands of dollars over the next five years.
Why your bank's renewal letter is almost never the best offer
Banks know that the majority of borrowers renew without shopping. Their renewal letters reflect that — the rate offered is typically 0.30%–0.80% higher than what the same lender would offer a new customer the same day. A licensed mortgage broker can negotiate that gap closed or shop the file to a competing lender willing to absorb your switch costs.
When to start the renewal conversation
Begin reviewing your options four to six months before maturity. Most lenders allow rate holds at that point, locking in today's pricing while preserving the right to drop if rates fall. Starting early also gives you time to qualify under a stress-test scenario if you want to switch lenders, or to bundle a refinance with the renewal.
Switching lenders at renewal
Switching at renewal is far simpler than mid-term — there's no prepayment penalty because your term is ending. The new lender typically covers most switch costs (legal, appraisal, discharge fees). The trade-off is requalifying under the stress test, which became less rigid in late 2024 for straight switches but still applies for any borrowed amount increases.
Renewing and refinancing in the same step
If you have a real need — debt consolidation, renovation, business capital — combining a renewal with a refinance often makes more sense than doing them separately. You'll requalify either way, and you avoid stacking transaction costs. Jay Klair structures these combined files frequently.
Have questions about your situation?
Every mortgage file has its own story. A 15-minute call with Jay is enough to know your real options.