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Quick answer: Start 120 days before your mortgage matures. That is when most lenders let you lock in a renewal rate early, and when other lenders will hold a rate for you. Since November 21, 2024, you can switch lenders at renewal without passing the stress test, as long as you keep the same loan amount and amortization. The first offer your lender sends is rarely its best. Compare at least two other offers, check whether your mortgage is a collateral charge (it affects switching costs), and if your payment will jump, ask about extending your amortization before you sign.
Key takeaways
- Many renewals in 2026 and 2027 are pandemic-era mortgages that started below 2%. Payments can jump by hundreds of dollars a month.
- Federally regulated lenders must send your renewal statement at least 21 days before maturity. Waiting for it leaves you almost no time.
- If you do nothing, many lenders roll you into a new term automatically, sometimes at a rate higher than they would offer if you asked.
Why this renewal is different
A Toronto homeowner who took a $450,000 mortgage balance at 1.99% with 22 years left would pay about $2,104 per month. Renewing that same balance at 4.29% costs about $2,627, which is over $500 more every month.
The Bank of Canada raised rates on October 28, 2026, and warned that around 10% of Toronto borrowers may have trouble refinancing in 2027. If that is you, the steps below matter even more.
The 120-day plan
| When | What to do |
|---|---|
| 120 days out | Find your maturity date, current balance, remaining amortization and whether your mortgage is a standard or collateral charge (ask your lender or check your original documents). |
| 110 days out | Get your credit report from Equifax and TransUnion (free). Fix errors now. |
| 100 days out | Ask your current lender for its renewal rates in writing. Ask a mortgage broker for two or three competing offers with rate holds. |
| 90 days out | Decide on term and type (fixed, variable, length). Ask each lender for its best rate, not the posted rate. |
| 60 days out | Negotiate. Tell your lender what the competing offers are. Many lenders match or beat them. |
| 45 days out | If switching, submit documents (income, property tax bill, mortgage statement). Switching usually takes 30 to 45 days. |
| 21 days out | Your renewal statement arrives. Compare it with what you negotiated. Sign the best option. |
Switching lenders: what changed and what didn’t
| Since November 21, 2024 | |
|---|---|
| Stress test when switching at renewal | Not required for a straight switch (same balance, same amortization) at federally regulated lenders. |
| Borrowing more or extending amortization | That is a refinance, and the stress test and normal qualification apply. |
| Owing more than 80% of your home’s value (uninsured) | Other lenders may not take the mortgage. You may be limited to your current lender. |
The collateral charge trap
Some banks register mortgages as a collateral charge, which lets them lend you more later without re-registering. It is convenient, but switching usually means discharging and re-registering the mortgage, which can cost legal fees. Many lenders offer to cover switching costs to win your business. Ask.
Renewing soon and wondering about selling or moving instead?
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Or call/text (647) 709-2814 · I speak English, Hindi and Punjabi
If the new payment is too high
- Extend the amortization. Going from 22 years back to 25 or 30 lowers the payment (but adds interest over time). At your current lender, this may not require re-qualifying.
- Choose a shorter term. If you expect rates to fall, a 1 to 3 year term avoids locking in for 5 years.
- Consolidate high-interest debt. Rolling a credit card or car loan into the mortgage can lower total monthly payments, but only if you stop adding new debt.
- Make a lump-sum payment at maturity. You can usually pay down any amount on renewal day with no penalty.
- Ask about hardship options. Under federal guidance, banks are expected to work with borrowers facing financial stress, for example by extending amortization or waiving some fees.
Mistakes that cost renewers money
- Signing the first letter. It is an opening offer.
- Only asking your own bank. Without competing offers, you have no leverage.
- Taking a variable rate you can’t afford if rates rise. The Bank of Canada said further increases are possible.
- Missing the 120-day window, then having no time to switch.
- Moving to a private lender without understanding the higher rates and fees. Use it only as a short bridge with an exit plan.
FAQ
How early can I renew my mortgage?
Many lenders allow renewal up to 120 days before maturity without a penalty. Earlier than that can trigger a prepayment penalty.
Do I have to pass the stress test to switch lenders at renewal?
Not for a straight switch at federally regulated lenders since November 21, 2024. If you borrow more or extend your amortization, normal qualification applies.
What happens if I don’t respond to my renewal letter?
Many lenders automatically renew you, often into a term they choose. You may lose the chance to negotiate.
Is a broker or my bank better for renewals?
Brokers can compare many lenders at once. Your bank may match competing offers. Getting both is usually best.
Know your home’s value before you renew.
Your equity affects your options. Get a free, no-pressure home valuation.
Or call/text (647) 709-2814 · Gursimran (Guru) Tamber, Sales Representative, CENTURY 21 People’s Choice Realty Inc., Brokerage
Keep reading
General information only, not mortgage or financial advice. Confirm terms with your lender or a licensed mortgage professional.
Sources: OSFI ends stress test for straight switches (BNN Bloomberg) · CTV: Toronto refinancing risk in 2027 · TD renewal survey 2026
ABOUT THE AUTHOR
Gursimran (Guru) Tamber, Sales Representative
CENTURY 21 People’s Choice Realty Inc., Brokerage · RECO registration #5027219 · CENTURY 21 Pacesetter Gold (2024) and Masters Silver (2023) award winner
Guru helps buyers, sellers and investors across the GTA, Hamilton and Waterloo. Before real estate, he spent close to two decades leading IT transformation projects for Fortune 500 brands across Asia, Europe and North America. He speaks English, Hindi and Punjabi.
