At the end of your term you can take your mortgage to another lender instead of renewing with your current one. The Financial Consumer Agency of Canada (FCAC) says: “You don’t have to renew your mortgage with the same lender. You can move your mortgage to another lender if their conditions better suit your needs” (FCAC: Renewing your mortgage). Moving at maturity means no prepayment penalty, and an uninsured mortgage that moves as a straight switch no longer has to pass the stress test. This page covers switching at renewal; the mortgage renewal guide covers the renewal timeline and negotiating with your current lender, and the mortgage renewal hub lists the related pages.
When switching makes sense
| Situation | Why a switch can pay |
|---|---|
| Another lender’s rate is lower for the same term, and your lender won’t match it | The rate gap applies to every payment for the whole term |
| You want features your lender doesn’t offer | Larger prepayment privileges, a gentler penalty method, portability or cash back |
| Your lender’s service doesn’t suit you | You’ll deal with the lender for the whole term, and often several |
| The new lender pays most of the switching costs | A small rate gap can then be enough |
| Situation | Why it may not be worth it |
|---|---|
| The rate gap is tiny and your lender has matched most of it | The saving may not cover your share of the costs or the paperwork |
| Your mortgage is registered as a collateral charge | Moving it can cost more and may mean repaying other loans it secures (see below) |
| You want to borrow more or extend the amortization | That is a refinance, not a switch; it is stress-tested and priced differently (renewal vs refinance) |
| A HELOC is bundled with the mortgage | The line of credit has to be repaid or moved too |
| The mortgage is almost paid off | Costs and effort outweigh the saving on a small balance |
To compare offers, count the rate difference over the whole term, your share of the switching costs, and anything the new lender pays or credits. Your current lender usually wants to keep you, so a written offer from another lender is often enough to get a better renewal rate without moving; how to negotiate your renewal covers that conversation.
The stress test and a straight switch
Before November 21, 2024, a borrower with an uninsured mortgage who moved to another federally regulated lender at renewal had to qualify at the stress-test rate, as if taking out a new mortgage. Borrowers who could afford their payments but not the higher qualifying rate could renew only with their own lender, which left them little room to negotiate. OSFI then exempted the straight switch:
- A refinance is stress-tested like a new mortgage: since November 21, 2024, OSFI exempts a stand-alone uninsured mortgage from the test only when it moves at renewal from one federally regulated lender to another with no increase in the remaining amortization and no increase in the loan amount beyond $3,000 for the costs of the move (a straight switch).
- The straight-switch exemption covers only a stand-alone uninsured mortgage: one that amortizes, isn't readvanceable and isn't part of a combined loan plan.
- In a straight switch the balance can rise by up to $3,000 to cover costs of the move such as penalties or fees, but no equity can be taken out.
Insured mortgages have their own exemption: in September 2024 the federal government announced a change that “allows all insured mortgage holders to switch lenders at renewal without being subject to another mortgage stress test” (Finance Canada). The test itself, and who else must pass it, is covered in the mortgage stress test guide.
| Situation | Stress test? |
|---|---|
| Renewing with your current lender | Not required to requalify |
| Straight switch at renewal (no increase in amortization; balance up only by the allowance for costs) | No, under the exemptions above |
| Switch that adds money or extends the amortization | Yes: it is treated as a refinance |
| New purchase, refinance or new HELOC | Yes |
The exemption removes the qualifying-rate test, not the approval. OSFI says that “When considering an uninsured straight switch application, an institution should assess the loan like any other new origination”, so the new lender still checks your credit, income and property. FCAC adds: “The new lender may use different criteria than your original lender to decide if you qualify for a mortgage.”
Who the exemption helps
A borrower renewing from a low rate. A household owes $475,000 at renewal with 20 years of amortization left. Its lender offers 4.59% for five years; another lender offers 4.34%. Before the exemption, the other lender would have had to qualify the household at 6.34%. If its income couldn’t support the payment at that rate within the lender’s debt service limits, staying was the only option. As a straight switch, it can take the lower offer: about $2,954 a month instead of about $3,017, or, over the five-year term’s 60 monthly payments, $3,762 less in payments, with a slightly lower balance at the end.
A self-employed borrower. A self-employed borrower owes $345,000 with 20 years left; the current lender offers 4.69% and a credit union 4.29%. The switch no longer has to clear the higher qualifying rate, though the credit union still verifies the borrower’s income as it would for any new mortgage. The lower rate cuts the payment from about $2,210 to about $2,137 a month.
| Borrower | How the exemption helps |
|---|---|
| Borrowed at a low rate and renewing at a higher one | Can move to another lender’s lower rate without qualifying at the higher stress-test rate |
| Income hasn’t kept pace with rates | Making the payments no longer has to be matched by qualifying at a rate above them |
| Higher other debts | The stress test magnified their effect on debt service ratios |
| Every renewing borrower | The option to switch gives leverage when negotiating with the current lender |
What switching costs
At maturity you owe your lender no prepayment penalty, but a switch has costs. FCAC lists “setup fees with the new lender, which may include discharge, registration, transfer and/or assignment fees from your current lender”, “an appraisal fee to confirm the value of your property (if necessary)” and “other administration fees”, and suggests you “Ask if your new mortgage lender is willing to pay for some or all your costs to switch.”
| Cost | Typical amount | Who usually pays |
|---|---|---|
| Your current lender’s discharge fee | Where the fee isn’t regulated, no charge, up to $400 | Often you; some new lenders reimburse it |
| Legal or notary work to discharge the old mortgage and register the new one | Varies; ask the new lender | Many lenders pay it for a straight switch |
| Appraisal, if the new lender requires one | Varies | Often the new lender |
| Title insurance, if required | Varies | Often included in the legal package |
The discharge fee range is from FCAC’s page on discharging a mortgage; the mortgage discharge process explains the steps. In a straight switch, OSFI lets the balance rise by a small allowance to cover costs like these (see the rule above).
Mortgage loan insurance. FCAC says you may have to pay a new mortgage loan insurance premium when you switch if the loan amount increases or you extend the amortization period. “If you already have mortgage loan insurance on your existing mortgage, tell your new lender. This may help you avoid paying mortgage loan insurance premiums twice.” Your current lender can give you the insurance certificate number.
The collateral charge problem
Some lenders register mortgages as a collateral charge instead of a standard (conventional) charge, and that changes what a switch involves. FCAC: “If that’s the case and you want to switch lenders, you may have to pay fees. These fees cover the removal of the charge from your existing mortgage and the registration of the new one.” It adds: “You must repay in full or transfer to the new lender all loan agreements secured by the collateral charge. This includes car loans or lines of credit.”
To find out which you have, FCAC says “ask your lender, lawyer or notary”, and to do it a few months before renewal. If you have a collateral charge, add the discharge and registration costs to your comparison and ask whether the new lender will cover them. Collateral vs conventional mortgages explains the difference.
How to switch, step by step
- Start a few months before maturity. Get quotes from your current lender (its best negotiated rate), a mortgage broker and another bank or online lender, and ask each how long it will hold the rate. The renewal guide has the full timeline.
- Gather your documents (below) and confirm your charge type.
- Apply with the new lender. It runs a credit check, verifies your income and employment, verifies your identity, may order an appraisal and issues a commitment letter.
- Sign with the lawyer or notary, who discharges the old mortgage, registers the new one and pays out your old lender. FCAC notes: “You need to sign the registration documents that are part of your mortgage contract. You may have to meet with your lawyer or notary.”
- Close on your maturity date. The new lender pays off the old one on that date, so there is no penalty and no gap; your first payment to the new lender follows its schedule.
| Document | Why it’s needed |
|---|---|
| Current mortgage statement | Shows the balance, maturity date and terms |
| Property tax assessment or bill | Confirms the property and its taxes |
| Proof of income (T4s, pay stubs, Notice of Assessment) | The new lender has to qualify you |
| Government photo ID | Identity verification |
| Home insurance details | Proof of coverage |
| Mortgage loan insurance certificate number, if insured | Helps avoid paying a premium twice |
| Charge type (standard or collateral) | Determines the legal work |
Switching before your term ends
Switching before maturity means breaking your contract, and a closed mortgage then usually carries a prepayment penalty; should I break my mortgage for a lower rate walks through that decision, and how mortgage penalties are calculated covers the penalty itself. Whether it pays depends on the full saving (lower payments and a lower balance at the end of the term) against the penalty and fees, which the mortgage break-even calculator guide works out; your current lender may also offer blend and extend instead.
Common questions about switching
Will switching affect my credit score? The new lender’s credit check is a hard inquiry, which can lower your score slightly for a while. How credit scores work explains inquiries.
What if my home’s value has dropped? The new lender’s appraisal may show a higher loan-to-value ratio than you expect, which can change the rate it offers or whether it approves the switch.
Can my lender penalize me for not renewing? Not at maturity: there is no prepayment penalty when the term has ended. You may still pay its discharge fee.
Can I switch from variable to fixed without changing lenders? Many variable-rate mortgages can be converted to a fixed rate with the same lender during the term; see convertible mortgages.
I’m moving, not just renewing. If you’re selling and buying, porting your mortgage may let you take your rate and terms to the new home.
Related reading
Sources
The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and October 2, 2026. How we check facts.
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Data table
- CMHC: CMHC Purchase
- Financial Consumer Agency of Canada: Discharging a mortgage
- Justice Laws (Canada): Eligible Mortgage Loan Regulations
- OSFI: Minimum qualifying rate for uninsured mortgages
- OSFI: OSFI exempts uninsured mortgage straight switches from the prescribed MQR and…
- OSFI: Amendments to the minimum qualifying rate for uninsured mortgages