Mortgage Renewal in Canada: How to Get the Best Deal (2026 Guide)

Roughly six out of ten Canadian homeowners renew their mortgage with their existing lender without shopping around. Most of them sign whatever rate appears in the renewal letter. The lenders know this, and they price accordingly.

If you're one of the 1.2 million Canadians whose mortgage comes up for renewal in the next year, this guide is for you. Your renewal is the single best opportunity you have to lower your interest cost, sometimes by tens of thousands of dollars over a five-year term, without doing anything more dramatic than making five phone calls and signing different paperwork.

Let's walk through how to do it.

Why Renewal Is Different From Your Original Mortgage

When you first took out your mortgage, you went through the full approval process: income verification, credit check, employment letters, stress test, the whole package. At renewal, none of that is required to stay with your current lender. They simply send you a renewal letter offering a new term at a new rate, and if you do nothing within the window, they roll you onto whatever terms the letter specifies.

That convenience comes at a price. The rate on a renewal letter is almost never the lender's best rate. It's the rate they offer customers who don't push back. Industry data suggests the gap between the posted renewal rate and the best available rate in the market often runs 0.30% to 0.75%.

On a $400,000 mortgage, a 0.50% rate difference over a 5-year term is roughly $11,000 in extra interest. That's the loyalty tax, and it's entirely avoidable.

The Renewal Timeline: When to Start Shopping

Your lender will send you a renewal letter somewhere between three and six months before your term ends. The letter often arrives even earlier — some banks start nudging you eight or nine months out.

Don't wait for the letter to start shopping. Here's the timeline that works:

• Six months before renewal: Pull your current mortgage details. Note your balance, remaining amortization, payment frequency, and the current rate.
• Four to five months before renewal: Start collecting rate quotes from other lenders and brokers. Most can hold a rate for 90 to 120 days, so quotes from this window are useful.
• Three months before renewal: Get a competing offer in writing. Bring it to your existing lender and ask them to match or beat it.
• One to two months before renewal: Make your final decision. If you're switching lenders, give the new one time to complete underwriting.

Starting late is the most common mistake. By the time you panic-shop with three weeks left, you have no leverage and no time to switch.

Step One: Know Your Numbers

Before you call anyone, gather these:

• Outstanding mortgage balance
• Remaining amortization
• Current monthly payment and payment frequency
• Current contract rate
• Property's current estimated value
• Recent property tax bill
• Your current credit score

Pull your mortgage statement for the exact balance — don't estimate. Run a quick check on your home's current value through a couple of sources (realtor.ca recent comparables, a Royal LePage or RE/MAX online valuation tool, or just ask a local agent for a quick market opinion).

The reason this matters: your loan-to-value ratio at renewal determines what's available to you. If your home has appreciated and you're now well under 80% LTV, you'll qualify for the best uninsured rates. If you're still above 80%, you may be limited to insurable products.

You can model your renewal payment instantly in our mortgage calculator — just plug in your current balance, your remaining amortization, and a few candidate rates.

Step Two: Get Three to Five Outside Quotes

Don't stop at your bank's competitor. Cast a wider net.

• Other big banks: RBC, Scotiabank, TD, BMO, CIBC, National Bank. They all want your business if you're a clean file.
• Credit unions: Often quietly competitive, especially in the prairies and BC.
• Monoline lenders: Companies like First National, MCAP, and others, accessed through a mortgage broker. Often the lowest rates in the market.
• A mortgage broker: A good broker shops dozens of lenders at once. The broker is paid by the lender, not by you, so quotes are typically free.

You're looking for two things from each quote: the rate, and any features that matter to you (prepayment privileges, portability, blend-and-extend options).

Don't fixate purely on rate. A 4.49% mortgage with 15% annual prepayment privileges and full portability is often a better deal than a 4.39% mortgage with 10% prepayment and no portability — especially if there's any chance you'll sell mid-term. We dig into why in our prepayment penalty guide.

Step Three: Negotiate With Your Current Lender

Once you have at least one strong outside quote in writing, call your existing lender. Not the renewal hotline — your branch, or better, your branch manager or mortgage specialist.

The script is simple:

"My mortgage is up for renewal in [X] months. I've received an offer from another lender at [rate] for a [term] fixed/variable. I'd prefer to stay with you, but I need you to match or beat that rate. What can you do?"

Be polite, be specific, be prepared to walk away. If they offer 0.20% above the competing rate, push back: "That's still higher than what I have in writing from [competitor]. Can we get to the same rate?"

Banks almost always have a discretion budget the front-line representative doesn't quote upfront. The branch can typically discount further than the renewal letter implies, especially for clients with strong credit and a good payment history.

If the rep says they can't go lower, ask to be transferred to retention. Every major Canadian bank has a retention team whose entire job is keeping mortgage clients who threaten to leave. They have authority the renewal department doesn't.

Step Four: Decide Whether to Switch or Stay

If your current lender matches your best outside quote, staying is the easier path. No new application, no appraisal, no legal fees, no risk of an underwriting surprise.

If they refuse to match, run the math on switching. A switch involves:

• Discharge fee from your current lender: Typically $250–$400
• Legal fees at the new lender: Often $500–$1,200 (some lenders offer a free legal package as part of the switch)
• Appraisal: Usually $300–$500, often covered by the new lender
• Title insurance: Often covered by the new lender

Many lenders offer a "cash back to cover switching costs" promotion. Ask. A typical switch from one big bank to another costs the borrower between zero and $500 out of pocket once promotions are netted out.

On a $400,000 mortgage at a 0.30% rate improvement over five years, you save about $6,500 in interest. Even a $1,000 switching cost is a strong return on that effort.

There's one situation where switching doesn't work: if you've taken on additional debt or your income has dropped, you may not pass underwriting at the new lender. In that case, you're stuck negotiating with your existing lender, and the leverage is weaker. Don't broadcast that vulnerability — just negotiate as if you have alternatives.

Step Five: Re-Evaluate Your Term and Amortization

Renewal is not just a rate decision. It's a chance to reset the structure of your mortgage. Things to reconsider:

Should you stay fixed or switch to variable? Your circumstances may have changed since you first signed. If your income has stabilized, your emergency fund is deeper, and you'd be comfortable absorbing rate movements, variable may be the better fit now. The opposite is also true. Our fixed vs. variable rate guide walks through the decision.

Is your amortization still right? Most people keep the existing amortization at renewal. But if your finances have improved, asking to shorten the amortization at renewal locks in higher principal payments and gets you mortgage-free sooner. If you're stretched, ask whether you can extend. We covered this in our amortization guide.

Should you take a shorter or longer term? The five-year fixed is the default Canadian choice, but it isn't always optimal. If rates feel high relative to history and you believe they'll fall, a two or three-year fixed gives you another shot at renewal sooner. If they feel low and you want certainty, the five-year is the safer harbour.

Do you need to access equity? Renewal is the cheapest moment in your mortgage life to add a Home Equity Line of Credit (HELOC) or refinance. If you're planning a renovation, paying off higher-interest debt, or investing in a rental, the renewal window gives you no-penalty access.

The Five Most Common Renewal Mistakes

Signing the renewal letter as-is. Almost always 0.30% to 0.75% above the best rate. Cost: thousands.

Waiting until the last month. No time to shop, no time to switch, no leverage. Cost: you sign the renewal letter, see above.

Focusing only on the rate. A 0.05% rate difference rarely matters as much as a strong prepayment privilege or portability if your life situation might change.

Forgetting to factor in switching costs honestly. A 0.50% improvement looks great until you realize the legal fees and appraisal cancel half of it. Run the full math.

Not negotiating the second time. Your bank's first counter is rarely their best counter. Ask once, ask again, ask retention.

What If You Have a Variable-Rate Mortgage?

Variable rates float with prime, so the "rate" on your renewal letter is the lender's discount or premium to prime — for example, "prime minus 0.50%." Compare these discount tiers, not absolute numbers. A move from prime minus 0.30% to prime minus 0.85% is significant; a move from 5.45% to 5.20% may just reflect Bank of Canada moves between when you signed and now.

If you have a fixed-payment variable that's been through rate hikes, your statement may show a stretched effective amortization. Renewal is the moment to reset that — ask the lender to recalculate your payment so the original amortization schedule is back on track, or set a new amortization you've consciously chosen.

The Bottom Line

Your renewal is worth the same hour or two of effort you put into shopping for your original mortgage. The structural change in your payment is identical: a small rate difference compounds over five years into real money.

Here's the simplified playbook: start five or six months before your renewal date, collect three to five outside quotes, bring the best one back to your existing lender, push for a match, and if they refuse, switch.

Five phone calls. A few hundred dollars in possible costs. Thousands of dollars in possible savings.

Run your renewal numbers in our mortgage calculator, build a short list of competing offers, and walk into your renewal conversation with leverage instead of without it. That's the difference between paying the loyalty tax and getting the deal you actually deserve.