Mortgage Renewal Guide 2026: How to Save Thousands

Why 2026 Is the Biggest Renewal Year in Canadian History

An estimated 60% of all outstanding Canadian mortgages are coming up for renewal in 2025 and 2026. Many of these mortgages were originated during the ultra-low rate environment of 2020 and 2021, when 5-year fixed rates dipped below 2%.

Even with rates significantly lower than the 2023 peak, borrowers renewing today are likely facing rates that are 1% to 2% higher than what they locked in five years ago. On a $500,000 mortgage, that difference can mean $200 to $400 more per month.

The good news: you are not stuck with your current lender's renewal offer. In fact, most renewal letters offer posted rates or minor discounts that are significantly higher than what you could get by shopping around.

When to Start Shopping: The 120-Day Rule

Most lenders allow you to lock in a new rate up to 120 days (four months) before your maturity date. This is your window to shop around without any commitment.

Here is the key advantage: if you lock in a rate today and rates drop before your renewal date, most brokers and lenders will give you the lower rate. If rates rise, you keep the rate you locked in. It is essentially a free option.

Start the process at least 120 days before your maturity date. Set a calendar reminder so you do not miss this window.

How to Compare Renewal Offers

When you receive your lender's renewal letter, do not sign it right away. Instead, compare it against the best available rates in the market. Here is what to look at:

• Interest rate: Compare the rate offered against the best rates available from other lenders. Even a 0.20% difference saves over $5,000 on a $400,000 mortgage over a 5-year term.
• Prepayment privileges: Look at how much you can prepay each year without penalty (typically 15% to 20% of the original balance). Better prepayment terms give you more flexibility.
• Penalty structure: Understand how the penalty is calculated if you need to break the mortgage early. Some lenders use a more borrower-friendly calculation than others.
• Portability: If you might move during the term, check whether the mortgage is portable to a new property without penalty.
• Blend-and-extend options: Some lenders offer the ability to blend your current rate with a new rate if you want to extend your term early.

Switching Lenders at Renewal: No Penalty

This is the single most important thing to understand about mortgage renewals in Canada: there is no penalty for switching lenders at renewal. When your term ends, you are free to move your mortgage to any lender offering a better rate.

The new lender typically handles the transfer process, and in many cases, the legal and appraisal fees are covered by the new lender as part of their switching incentive. For most straightforward switches, you do not even need a new appraisal.

The process takes two to four weeks, which is why starting 120 days early gives you plenty of time to compare, negotiate, and complete the switch before your maturity date.

How to Negotiate With Your Current Lender

Even if you prefer to stay with your current lender, having a competing offer gives you significant leverage. Here is how to negotiate effectively:

What Documents You Need for Renewal

If you are staying with your current lender, the paperwork is minimal — often just signing the renewal agreement. If you are switching lenders, you will typically need:

• Government-issued photo ID
• Recent pay stubs or employment letter (for income verification)
• Most recent Notice of Assessment from the CRA
• Current mortgage statement showing balance and maturity date
• Property tax statement
• Proof of property insurance