Getting a renewal letter from your lender can feel like a formality, but it’s actually one of the few moments in your mortgage where you have real leverage. When your term ends you can renew with your current lender as offered, negotiate a better deal, or move your mortgage to a different lender entirely, usually without any prepayment penalty.
The offer your current lender sends first isn’t always its best rate. It’s often just a starting point. This guide covers how much lead time to give yourself, what to compare, and how to avoid simply signing the first offer.
Key renewal timelines in Canada.
What your renewal statement must tell you
Federally regulated lenders, such as the big banks, must send you a renewal statement at least 21 days before your term ends. It must show your remaining balance, the new interest rate, the payment amount and frequency, the term being offered and any fees. If the lender intends to renew you automatically when you don’t respond, the statement has to say so.
The federal Canadian Mortgage Charter also sets the expectation that lenders contact you four to six months before renewal. In practice, the earlier you start, the more options you have.
A renewal timeline that keeps your options open
- 6 months out
Know your numbers
Find your maturity date, balance and remaining amortization. Note any changes you want, such as a shorter amortization or a HELOC.
- 4 months out
Shop the market
Get quotes from your lender, a broker and at least one other lender. Many will hold a rate for up to 120 days.
- 2–3 months out
Negotiate or apply
Show your lender competing offers, or start an application to switch. Switching takes a few weeks of paperwork.
- 21+ days out
Review the statement
Compare the formal renewal offer to your best alternative and confirm your decision in writing.
- Maturity date
New term begins
Your new rate and payment take effect. If you did nothing, you may have been auto-renewed.
Your four options at renewal
What you can do when your term ends
Renew as offered
- Least effort
- Often not the best rate available
- Watch for automatic renewal
Negotiate
- Use competing quotes as leverage
- Lenders often have room to move
- No new application in most cases
Switch lenders
- No penalty at maturity
- No stress test for a straight switch
- Some legal and appraisal costs, often covered
Refinance
- Change the amount or amortization
- Full new application and stress test
- Useful to consolidate debt or access equity
How much does a better rate actually save?
Small rate differences add up quickly on a large balance. Here’s the same $450,000 balance with 20 years left, renewed for five years at three different rates:
Interest paid over a 5-year term on $450,000
Monthly payment at each rate
| Rate | Monthly payment | Balance after 5 years |
|---|---|---|
| 4.89% | $2,930 | $374,477 |
| 4.59% | $2,858 | $372,471 |
| 4.29% | $2,787 | $370,430 |
What to compare besides the rate
- Term length: a shorter or longer term can matter as much as the rate, depending on where you think rates are going and your plans for the home.
- Prepayment privileges: how much extra you can pay each year without a penalty.
- Penalty calculation: how the lender would calculate a penalty if you break the mortgage early. Big banks often use posted rates, which can make penalties larger.
- Portability: whether you can take the mortgage with you if you move.
- Collateral vs. standard charge: a collateral charge can make it more expensive to switch lenders later.
Watch out for automatic renewal
If you ignore the renewal letter, many lenders will automatically renew you, often into the same term at the rate they offered. That’s rarely the best outcome. Mark your maturity date in your calendar well ahead of time, and make a deliberate choice.
A simple renewal checklist
- Find your maturity date, balance and remaining amortization.
- Decide whether you want to change anything: amortization, term, payment frequency or amount.
- Get at least two competing quotes about four months before maturity.
- Ask your current lender to match or beat them.
- Compare the full package, not just the rate.
- Confirm your choice in writing before the maturity date.
Examples use illustrative rates and Canadian semi-annual compounding, and are rounded. They are not rate quotes or advice. Last reviewed September 2026.