Start Shopping 120 Days Early
Most lenders allow you to lock in a renewal rate up to 120 days before your mortgage maturity date. Starting early gives you:
- Rate protection: If rates rise before your maturity date, you're already locked in.
- Negotiating leverage: You're not desperate. You have options and time.
- Lender switching time: Moving your mortgage to a new lender takes 4–6 weeks. Starting at 30 days is too late.
Watch the early renewal offer: Your bank may contact you 5–6 months before renewal with a "special offer." These are rarely their best rates — they're designed to lock you in before you shop around.
Understanding Your Bank's Renewal Offer
When your renewal letter arrives, it will typically offer a rate — but not their best one. Banks know most customers will sign without shopping. The posted renewal rate is designed to maximize the bank's margin, not save you money.
What the letter won't say:
- That competitors may offer 0.20–0.60% lower
- That you can negotiate the rate over the phone with no penalty
- That switching lenders at maturity is free — no penalty, no legal fees in most cases
Always call your lender and ask: "Is this your best available rate?" Then compare with a broker before committing.
Renewal Savings Calculator
See how much you could save by shopping your renewal vs signing your bank's offer.
Switching Lenders at Renewal
Switching lenders at your maturity date is free. Unlike breaking your mortgage mid-term, there is no prepayment penalty when you leave at the end of your term. The new lender typically covers any legal costs for standard switches.
What the switch involves
New mortgage application
A standard application with the new lender. Takes 1–3 business days to approve.
Credit check
The new lender will pull your credit. A broker submits to multiple lenders with one application.
Property appraisal
Renewal switches rarely require a new appraisal for standard residential properties.
Legal transfer
New lender's solicitor handles the title transfer. Usually covered by the new lender.
Fixed vs Variable at Renewal
Each renewal is a fresh decision on rate type. The right choice depends on your financial situation, risk tolerance, and the current rate environment.
| Fixed Rate | Variable Rate |
|---|---|
| Payments never change | Payments fluctuate with Bank of Canada rate |
| Higher rate at time of commitment | Usually lower initial rate |
| Best for tight budgets or rate anxiety | Best if you can handle payment changes |
| Penalty to break = IRD (can be large) | Penalty to break = 3 months interest only |
| Historically less optimal over long run | Historically outperforms fixed over time |
For most Ontario homeowners in 2026, a 2- or 3-year fixed term offers a balanced approach — capturing lower rates in a declining rate environment without locking in for too long.
Early Renewal and Blend-and-Extend
If rates have dropped significantly since you took out your current mortgage, you may benefit from a blend-and-extend — a mechanism that lets you renew early without a traditional prepayment penalty.
The lender blends your existing (higher) rate with the current (lower) rate, then extends your term at the blended rate. Example:
Current rate: 5.49% with 18 months remaining
Current 5-year fixed offered: 4.59%
Blended rate (approx): ~4.90% for a new 5-year term
Net savings vs waiting: Lower rate sooner, no penalty
Blend-and-extend math is complex and varies by lender. A broker can model whether it makes sense for your remaining balance and rate.
Why Use a Broker for Renewal
A mortgage broker shops your renewal across 30+ lenders at once. They have access to rates that aren't advertised publicly and can negotiate on your behalf — at no cost to you.
Access to 30+ lenders
Banks, credit unions, monoline lenders, and trust companies all compete for your business.
No cost to you
Brokers are compensated by the lender. You pay nothing for the service.
One application
A broker submits one application to multiple lenders — one credit check, multiple offers.
Rate hold security
A broker holds rates from multiple lenders simultaneously while you decide.