Renewal Rates, Costs and 2026 Rules
The Canadian Mortgage Charter at renewal: what lenders are expected to offer
What the Canadian Mortgage Charter and FCAC's guideline mean when you renew, including early contact, temporary amortization extensions and relief if a payment jump is unaffordable.
The Canadian Mortgage Charter is a set of federal expectations, announced by the Department of Finance in late 2023, for how federally regulated lenders treat existing mortgage holders, especially those facing payment shock at renewal. In practice it means your lender should contact you well before renewal, should consider relief such as a temporary amortization extension if the new payment puts you at risk of hardship, and should not charge fees or penalties for that relief. It is backed by the Financial Consumer Agency of Canada's guideline on existing consumer mortgage loans in exceptional circumstances. It does not give you a legal right to a particular rate, and it does not bind provincially regulated credit unions or caisses in the same way.
This guide is part of the mortgage renewal rates overview. Read the current Charter text on the federal government's website, as the details may be updated.
What the Charter asks lenders to do
The Charter's main expectations relevant to renewal include:
| Expectation | What it means for you at renewal |
|---|---|
| Contact borrowers four to six months before renewal | You should hear about the renewal and its terms early enough to compare and plan |
| Tailored relief for borrowers at risk | Options such as a temporary amortization extension, changing the payment schedule or a lump-sum arrangement |
| No fees or costs for relief measures | Relief you agree to should not come with extra administration charges or penalties |
| No interest on interest from relief | If relief means payments do not cover the interest, lenders should not compound interest on the unpaid interest |
| Switching at renewal without re-taking the stress test | Insured borrowers switching at renewal are not re-tested, and since November 2024 OSFI has removed the test for uninsured straight switches too |
The full list contains a few more items, including expectations on handling borrowers in default. Check the official text before relying on any single item.
FCAC's guideline: the enforceable part
The Financial Consumer Agency of Canada supervises how federally regulated financial institutions treat consumers. Its guideline on existing consumer mortgage loans in exceptional circumstances describes how it expects banks to identify borrowers at risk, offer relief, explain the options clearly and avoid charging for them. FCAC can follow up with banks that fall short. If you believe a bank is not meeting these expectations, raise it with the bank's complaints office first; see how to complain about a mortgage lender.
Who counts as "at risk"
There is no single income test. Lenders look at signs such as:
- A large increase in payment at renewal compared with your current payment
- Missed or late payments, or a sudden drop in income
- High debt service ratios at the new payment
- A fixed-payment variable mortgage that has passed its trigger rate
You do not have to wait for the lender to identify you. If the renewal payment will be hard to meet, contact your lender before the maturity date and ask what relief is available.
Worked example: a temporary amortization extension
Illustrative figures: a balance of $418,763 at renewal, 20 years left, renewal rate 4.29%, semi-annual compounding.
- Payment over 20 years: $2,593.61
- Payment if the amortization is extended to 25 years: $2,269.10
The extension lowers the payment by $324.51 a month. The cost: if the 25-year amortization stayed for the whole life of the mortgage at the same rate, total interest would be about $261,967 instead of about $203,703, an extra $58,264 or so.
That is why the Charter speaks of temporary extensions. A common approach is to extend for a period and return to the original schedule later, for example by raising the payment at the next renewal or by making prepayments when income recovers. Ask your lender to put the end date and plan in writing. For the arithmetic of permanent extensions, see extending your amortization at renewal.
Insured mortgages
Insured mortgages are normally limited to the maximum amortization allowed when the insurance was obtained. The Charter and the mortgage insurers' policies allow temporary relief, including amortization changes, for insured borrowers in difficulty. These are arranged through your lender, which works with the insurer: CMHC, Sagen or Canada Guaranty.
What the Charter does not do
- It does not set or cap renewal rates.
- It does not require your lender to renew you on any particular terms.
- It does not stop interest from being charged on your mortgage.
- It does not cover private lenders and may not apply in the same way to provincially regulated credit unions and caisses, which follow their provincial regulators.
Checklist: asking for relief
- Calculate the renewal payment with the renewal payment calculator.
- List your monthly income and essential costs to show the gap.
- Contact your lender before the maturity date, in writing if possible.
- Ask which relief options it offers and whether any fees or penalties apply.
- Ask how each option affects total interest and the amortization.
- Ask for the end date of any temporary measure and what happens after.
- Keep copies of every letter and note the name of each person you speak to.
When to get help
If you are already behind on payments or have received a demand letter, speak to a non-profit credit counselling service, a lawyer (a notary in Quebec) or your provincial consumer office. Acting before the lender starts enforcement keeps more options open.
Relief is only one option. If you can qualify elsewhere, a lower rate may do more for your budget: see the stress test when switching and, if your mortgage is insured, insured vs uninsured renewal rates for how insurance limits amortization changes.
Frequently asked questions
Is the Mortgage Charter a law?
It is a set of expectations from the federal government, supported by FCAC's guideline for the federally regulated institutions it supervises. It is not a stand-alone statute, but FCAC monitors how banks follow its guidance.
Will relief hurt my credit?
Relief agreed with your lender before you miss payments is generally better for your credit than missed payments. Ask your lender how the arrangement will be reported.
Can I ask for relief if my lender is a credit union?
Yes. Many credit unions offer similar options, but the federal Charter may not bind them directly. Ask your credit union and check your provincial regulator's guidance.
Does an amortization extension change my renewal rate?
Not usually. It changes how long you take to repay and therefore the payment, not the rate itself.
Sources
- Department of Finance Canada — the Canadian Mortgage Charter
- Financial Consumer Agency of Canada — guideline on existing consumer mortgage loans in exceptional circumstances
- Canada Mortgage and Housing Corporation — insured mortgage relief options
- Office of the Superintendent of Financial Institutions — the stress test and switching at renewal
