By Travis Bannert, Mortgage Broker, Next Door Mortgages – Dominion Lending Centres
Your mortgage term is ending. That letter makes renewal look like a formality: sign here, carry on. It isn’t. Renewal is the one moment everything is negotiable again — rate, term, lender, structure — and the moment most Canadians give away the most money by signing the first offer.
This guide explains how mortgage renewal works in Canada, when to start, what your options are, and the mistakes that cost Edmonton homeowners thousands.
What a mortgage renewal actually is
Two different clocks run on your mortgage, and confusing them is where renewal mistakes start.
Your amortization is the full payoff timeline — often 25 years. Your term is the length of your current contract — usually 5 years or less. When the term ends, you must either pay off the balance in full or sign a new contract. That new contract is your renewal.
At renewal, everything is set fresh: your rate, the length of your new term, your payment schedule, and your prepayment privileges. That is why renewal deserves the same attention you gave your original mortgage — it is, in effect, a new mortgage negotiation.
When to start: the renewal timeline
Under the Canadian Mortgage Charter, lenders are expected to contact homeowners 4–6 months before renewal. Do not wait for that letter to start thinking about it. Use this timeline:
- 4–6 months out: Find your maturity date and your remaining balance, and start comparing your options. This is when you have the most leverage and the most time to switch if a better deal is available.
- 120 days out: Many lenders will hold a rate for up to 120 days, so you can lock in a competitive rate while you decide — without committing to a lender yet.
- 21 days out: The Financial Consumer Agency of Canada (FCAC) requires federally regulated lenders to send you a renewal statement at least 21 days before your term ends, and to notify you at least 21 days ahead if they will not renew your mortgage.
- Maturity day: Your new term begins. If you have done nothing by then, your lender may renew you automatically — usually not on your best terms.
Some homeowners can also renew early. If your lender offers an early renewal, read the terms carefully before accepting: an early renewal can be convenient, but it can also lock you in before you have compared the market. Learn more in our guide to renewing your mortgage early and early renewal offers in Canada.
Your three options at renewal
You have three real choices at renewal. Each one suits a different situation — and the right one depends on your rate, your plans, and whether you need to change the mortgage itself.
1. Renew with your current lender
This is the easiest option, and the one most Canadians choose. It is also the one that costs the most people the most money. The offer in your renewal letter is an opening offer, not your lender’s best rate. Lenders expect you to negotiate — and they reserve their sharpest pricing for borrowers who ask, or who show they are prepared to leave. Read more about why your bank’s first renewal offer is rarely its best.
2. Switch to a new lender
Switching means moving the same balance, with the same remaining amortization, to a new lender. No new money, no longer timeline — and no prepayment penalty when you switch at maturity.
Switching has also become easier. Since November 21, 2024, OSFI no longer requires the mortgage stress test on a straight switch of an uninsured mortgage between federally regulated lenders. Insured mortgages were already exempt under the Canadian Mortgage Charter. That means many homeowners who once felt locked in can now move for a better rate without re-qualifying at the stress-test rate. Learn more about who is exempt from the mortgage stress test on renewals and switches and our guide to switching to a new lender at renewal in Canada.
3. Refinance
Refinancing is different from renewing or switching. It means taking a larger balance, a longer amortization, or both — for example, to consolidate debt or pay for renovations. A refinance is a full new application, and it is stress-tested. Compare the three paths in our guide to renewal vs. refinance vs. switch in Canada.
Not sure which option saves you the most? Run the numbers through our free Pre-Approval & Refinance Check, or call Travis Bannert at 780-720-8240.
What happens if you do nothing
Doing nothing is still a decision — and it is usually the most expensive one. The FCAC warns that your mortgage may renew automatically into a term your lender selects, at a rate that is not its best. Some lenders roll borrowers into a short open term at a much higher rate, which can mean hundreds of dollars more per month until you notice and act.
At a minimum, read your renewal letter, check the rate and term being offered, and compare it before your maturity date. A few minutes of comparison at renewal can save thousands over the next term.
The Edmonton angle
Renewal works the same way across Canada, but Edmonton homeowners have a few local advantages worth knowing about.
There is no land transfer tax in Alberta, which keeps the cost of moving — and of switching — lower than in many other provinces. Edmonton equity growth may also move some owners from an insured mortgage into uninsured or insurable territory, opening up more lender options at renewal. And Edmonton borrowers are not limited to the big banks: national lenders, Alberta credit unions, and monoline lenders all compete for renewal business here — but generally only for borrowers who ask.
That competition is exactly why comparing your renewal, rather than simply signing it, matters so much in this market.
Your renewal, reviewed — free
If your mortgage renews in the next 12 months, do not sign the first offer. Send your renewal letter and maturity date through our Pre-Approval & Refinance Check, and we will review your options with you — free, with no obligation.
You can also use our Mortgage Renewal Check and our Renewal Comparison Calculator to see how different rates and terms compare.
Or call Travis Bannert, Next Door Mortgages (BFL Dominion Lending Centres), at 780-720-8240.
Common questions about mortgage renewal in Canada
How early can I renew?
Many lenders open a no-penalty early renewal window 120 or more days before maturity, and competitors will hold a rate for up to 120 days. Start 4–6 months out so you have time to compare and negotiate.
Do I have to pass the stress test to renew or switch?
Renewing with your current lender does not require re-qualification. A straight switch is also exempt from the stress test: insured mortgages are exempt under the Canadian Mortgage Charter, and uninsured mortgages have been exempt since OSFI’s change on November 21, 2024. Refinancing, by contrast, is a fully stress-tested new application.
Is there a penalty for switching lenders at renewal?
No. A prepayment penalty applies only when you break a mortgage mid-term. At maturity, you can switch penalty-free. Smaller administrative costs may apply — such as a discharge fee, an appraisal, or legal and registration costs — and new lenders often cover some or all of them.
What happens if I ignore my renewal letter?
Your mortgage may renew automatically into a term and rate your lender chooses, which is rarely your best option. Your lender must also tell you at least 21 days in advance if it will not renew your mortgage.
Can I change my amortization or payments at renewal?
Yes — penalty-free. You can shorten your amortization, raise your payments, or change your payment frequency at renewal. Extending your amortization or increasing your balance, however, is a refinance, and it requires full re-qualification, including the stress test.
By Travis Bannert, Mortgage Broker, Next Door Mortgages – Dominion Lending Centres
Disclaimer: This article is general information for education only. It is not financial advice. Mortgage program rules, lender policies, and regulations can change — please confirm current terms before making a renewal decision.