Renew, or switch? Run the number first.
At maturity, leaving costs nothing and staying is not free. Here is the arithmetic on both paths, what the fees actually are, and what changed in your favour in 2024.
A renewal letter is the only piece of mail your lender sends that costs you money if you simply agree with it. It arrives late by design — a federally regulated lender is required to send it at least 21 days before your term ends — and it asks for a signature, not a decision. Most people give it one. The Financial Consumer Agency of Canada found that 20% of mortgage holders did not compare lenders at all, and 13% did not realise the rate was negotiable in the first place.
The useful thing to understand about maturity is that it is the one day in the whole term when leaving is free. There is no penalty to move, because there is nothing left to break. So the question is never "is switching worth the penalty" — there isn't one. It is simply: does the rate difference beat the setup costs? That is arithmetic, and it is worth doing before the signature.
What a quarter point actually costs.
An illustration, not a quote: a $500,000 balance with 25 years of amortization left, over a five-year term. The column that surprises people is the last-but-one — a higher rate does not just charge you more interest, it also pays your principal down more slowly, so you arrive at the end of the term owing more as well.
| If your renewal rate is higher by | Extra per month | Extra interest over the term | Extra still owing at the end | Total cost |
|---|---|---|---|---|
| 0.25% | $69.91 | $5,992 | $1,797 | $7,789 |
| 0.50% | $140.66 | $11,995 | $3,556 | $15,551 |
| 0.75% | $212.23 | $18,008 | $5,275 | $23,283 |
Police, RCMP, corrections or CBSA? Renewal collides with postings, and pay that was too new to count last time may now have the history behind it. Our officer desk covers that specifically — renewal, postings and shift pay at officerfinancing.ca. Same broker either way.
Computed on Canadian semi-annual compounding, the same convention this site's calculators use. Your own balance, amortization and term change every figure — which is the point of measuring yours rather than reading someone else's.
Two paths, neither of them a penalty.
You sign the offer your current lender mailed you and the mortgage carries on with the same institution.
- No new approval, no new appraisal, no lawyer — the mortgage simply continues.
- No prepayment penalty: at maturity there is nothing to break.
- The rate is whatever they offered, which is not always the rate they would give to keep you.
- Doing nothing is itself a decision — the FCAC warns renewal may happen automatically.
At maturity the mortgage moves to a different lender at their rate, with the balance and amortization carried over.
- Still no prepayment penalty — the term has ended, so nothing is being broken.
- The new lender has to approve you, and may use different criteria than your current one.
- Setup costs can apply — discharge, registration, transfer or assignment, and sometimes an appraisal.
- Since November 2024, an uninsured straight switch is no longer held to OSFI's prescribed qualifying rate.
The switch got easier. It did not get automatic.
On 21 November 2024, OSFI stopped prescribing the minimum qualifying rate that federally regulated lenders were expected to apply when an uninsured borrower moved to a new institution at renewal. In plain terms: the extra rate cushion you previously had to clear just to move your existing mortgage across the street is no longer imposed by the regulator.
Two limits matter, and they are the reason this is described honestly here rather than as a free pass. First, it applies to a straight switch — OSFI's own definition is an existing stand-alone uninsured mortgage moving between federally regulated institutions with no increase in the loan amount and no increase in the remaining amortization. Take extra money out, or stretch the amortization, and it is a refinance again. Second, the lender still assesses the application like any new mortgage under Guideline B-20. The regulator removed a prescribed floor; it did not remove underwriting.
If your mortgage is insured, this change does not speak to your file — OSFI wrote it for uninsured mortgages. CMHC does not publish a public rule covering an already-insured mortgage moving between lenders at renewal, so rather than invent one, we confirm the treatment with the insurer and the lender on your actual mortgage. Mention the insurance early; it changes which lenders are worth approaching first.
Twenty-one days is a floor, not a plan.
The useful window. Your rate can be shopped while you still have every option, including staying exactly where you are. Lenders will hold a rate ahead of maturity — how far ahead varies by lender, and it is one of the first things worth confirming on your own mortgage.
If your lender is federally regulated — a bank, for instance — it must send you a renewal statement by this point, and must also tell you by then if it does not intend to renew at all. Twenty-one days is a legal floor, not a planning horizon.
No penalty applies on either path. This is the one day of the term when leaving is free, which is precisely why the offer in your hand deserves to be measured rather than signed.
The FCAC's wording is blunt: the renewal may be automatic, and you may not get the best interest rate and conditions. Silence is not neutral — it is an answer.
Measure your renewal before you sign it.
The mortgage checkup takes about a minute: five questions about your mortgage, and a straight read on where your rate sits against today's market — including an estimate of what breaking early would cost, if your term has not ended yet. Plenty of checkups end with "stay put." The difference is knowing it instead of assuming it.
The questions the letter does not answer.
Is it worth switching lenders at renewal, or should I just sign?+
It is arithmetic, and the arithmetic is usually larger than people expect. On a $500,000 balance over a five-year term, a rate that is only a quarter point higher costs about $7,789 — roughly $5,992 in extra interest plus about $1,797 more still owing at the end, because the higher rate also pays your principal down more slowly. At half a point the gap is roughly $15,551. Whether switching wins depends on that number against the setup costs, which is a calculation, not an opinion.
Do I pay a penalty to switch lenders at renewal?+
No. A prepayment penalty applies when you break a mortgage before its term ends. At maturity the term has ended, so there is nothing to break and no penalty on either path. This is the single most common misunderstanding about renewal, and it costs people real money — the penalty they are avoiding does not exist. Breaking mid-term is a different question entirely, and one worth pricing properly.
What does it actually cost to move my mortgage to another lender?+
The Financial Consumer Agency of Canada lists what may apply: setup fees with the new lender, which can include discharge, registration, transfer and/or assignment fees from your current lender, an appraisal fee to confirm the property's value if one is needed, and other administration fees. What any individual lender charges or absorbs varies, so these get priced on your specific file rather than assumed.
Do I have to requalify to switch lenders?+
The new lender does have to approve the mortgage, and the FCAC notes it may use different criteria than your original lender. What changed is the bar: since 21 November 2024, OSFI no longer prescribes the minimum qualifying rate for an uninsured straight switch — an existing stand-alone uninsured mortgage moving between federally regulated institutions with no increase in the loan amount or the remaining amortization. The lender still underwrites the file under Guideline B-20. It is a lower hurdle, not the absence of one.
What counts as a straight switch?+
OSFI's definition is specific: an existing stand-alone uninsured mortgage moving from one federally regulated financial institution to another, with no increase in the remaining contractual amortization period and no increase in the loan amount. Add a dollar to the balance or a year to the amortization and it is no longer a straight switch — it is a refinance, and it is assessed as one.
Does this apply if my mortgage is insured?+
OSFI's 2024 change is written specifically for uninsured mortgages, so it does not speak to insured files. CMHC does not publish a public rule for moving an already-insured mortgage between lenders at renewal, and rather than guess at one we confirm the treatment with the insurer and lender on your actual file. If your mortgage carries default insurance, tell us — it changes which lenders are worth approaching first.
When should I start looking at my renewal?+
Earlier than the letter arrives. A federally regulated lender only has to send your renewal statement 21 days before the term ends, which is enough time to sign and not much else. Four to six months out you can still shop properly and hold a rate while you decide. The window for holding one varies by lender, so it is worth confirming yours rather than assuming.
How many people actually shop their renewal?+
Fewer than you would think, and the FCAC has measured it: 20% of mortgage holders did not compare lenders at all, 13% did not know that negotiating the rate or terms was even an option, and 37% chose their lender mainly because they already banked there. Meanwhile 77% said a better interest rate would motivate them to move. The gap between those last two figures is where the money sits.
Price it on your own numbers.
Every rule and survey figure on this page is quoted from a primary source. Where a source does not cover something — the insured transfer case, or how far ahead an individual lender will hold a rate — this page says so rather than filling the gap.
- OSFI — straight switches exempt from the prescribed minimum qualifying rate — Published 21 November 2024
- Financial Consumer Agency of Canada — Renewing your mortgage — Last updated 15 October 2025
- FCAC research — how Canadians actually shop at renewal — Published March 2026, updated June 2026