Renewal Rates, Costs and 2026 Rules
Mortgage renewal rates in Canada: how they are set and how to get a better one
How Canadian mortgage renewal rates are set, why the first offer is rarely the best, the 2026 rules on switching and renewal statements, and what to compare.
A mortgage renewal rate in Canada is the rate a lender offers you for the next term once your current term matures. It is not a regulated or published figure: each lender sets it from its own funding costs, the Bank of Canada's policy rate, your mortgage's insurance status, your equity and the term you choose, and the rate on the renewal letter is often higher than the lender's best price. To get a better rate, start four to six months before maturity, collect at least two written offers for the same term and rate type, and ask your lender to beat them. Since November 2024 you can usually switch an uninsured mortgage to another federally regulated lender at maturity without re-taking the stress test, which makes moving a realistic threat.
Every rate below is an illustrative example, not a current market rate. Check today's posted rates on lenders' own sites and the Bank of Canada's published data.
What a renewal actually is
A Canadian mortgage has two time periods. The amortization is the total time to repay the loan, commonly 25 years at the start. The term is the length of the current contract, most often five years, after which the rate, payment and conditions are renegotiated. At the end of each term you renew, switch lenders, or pay the mortgage off. A household with a 25-year amortization and five-year terms will usually renew four times.
At renewal, your current lender does not need to re-approve you in most cases. It sends a renewal offer, and if you sign it, the mortgage continues with a new rate and term on the same registered charge. Federally regulated banks must send a renewal statement before the term ends, and the details are set by the federal cost-of-borrowing rules; see auto-renewal and the renewal statement.
The main things that move your renewal rate
| Factor | Effect on the offer | What you can do |
|---|---|---|
| Government of Canada bond yields | Fixed rates tend to follow bond yields of a similar maturity | Watch the trend; lock a rate hold when it suits you |
| Bank of Canada policy rate | Moves lenders' prime rates and therefore variable rates | Compare variable offers as "prime minus" or "prime plus" a spread |
| Insured or uninsured | Insured mortgages usually get lower rates because the lender's risk is covered | Know which you have; insured status carries over on a switch |
| Equity (loan-to-value) | More equity can mean a better uninsured rate tier | Check your home's likely value; a lump sum can move you into a lower tier |
| Term and rate type | Each term length and fixed or variable is priced separately | Compare offers for the same term and type only |
| Your credit and income | Matter mainly if you switch or refinance | Check your credit reports before shopping |
| Retention pricing | Lenders often start renewals above their best rate | Use written outside offers to negotiate |
The full explanation is in what determines your renewal rate.
How much a rate difference is worth
Rate gaps that look small add up on a large balance. Illustrative example: $420,000 owing, 20 years of amortization left, five-year fixed term, semi-annual compounding as is usual for Canadian fixed-rate mortgages.
| Offer | Monthly payment | Interest over 5 years | Balance after 5 years |
|---|---|---|---|
| Renewal letter at 4.49% | $2,645.48 | $85,737.58 | $347,008.72 |
| Negotiated at 4.34% | $2,612.29 | $82,791.98 | $346,054.88 |
| Other lender at 4.19% | $2,579.30 | $79,850.89 | $345,092.71 |
Moving from the letter rate to the outside offer saves $5,886.69 of interest over the term ($85,737.58 - $79,850.89) and leaves the balance $1,916.01 lower. If switching costs you $750, you are still well ahead. You can test your own figures in the renew-vs-switch calculator.
The rules that matter in 2026
- Stress test on a switch. OSFI's Guideline B-20 requires federally regulated lenders to qualify uninsured borrowers at the greater of the contract rate plus 2 percentage points or 5.25%. Since 21 November 2024, that minimum qualifying rate no longer applies to a straight switch of an uninsured mortgage at renewal, as long as the balance and amortization do not increase. Insured mortgages switching at renewal were already exempt. See the stress test when switching.
- Canadian Mortgage Charter. The federal government's Charter sets out expectations for lenders, including contacting borrowers well before renewal and offering relief such as temporary amortization extensions to people at risk of financial hardship. See the Canadian Mortgage Charter at renewal.
- Interest Act. For a mortgage term longer than five years, an individual borrower can pay off the mortgage after the fifth anniversary with no more than three months' interest as a penalty. Fixed-rate mortgage rates must be disclosed as calculated yearly or half-yearly, not in advance, which is why most fixed mortgages compound semi-annually.
- Provincial rules. Credit unions and Quebec's caisses are mostly provincially regulated, and mortgage brokers are licensed provincially. In Quebec the mortgage is a hypothec registered through a notary; see Quebec renewal differences.
Choices you make at renewal
The rate is only one decision. At maturity you can also choose:
- Fixed or variable, and an adjustable or fixed-payment variable product. See fixed vs variable at renewal.
- The term length, from six months to ten years. See choosing a renewal term.
- Insured pricing tiers if your mortgage was originally insured. See insured vs uninsured renewal rates.
- A lump-sum prepayment on the maturity date, usually free of penalty.
- A change in amortization, which affects payment and total interest.
The worked numbers for these decisions are in the calculations and checklists section.
When to get professional help
Talk to a licensed mortgage broker or your lender's mortgage specialist if you have irregular income, a recent credit problem, a separation, or a balance that will be hard to qualify for elsewhere. If you are already behind on payments, contact your lender before maturity and ask what relief it offers under the Canadian Mortgage Charter. For legal questions about a charge, discharge or power of sale, a real estate lawyer (a notary in Quebec) can advise.
Frequently asked questions
Are mortgage renewal rates higher than rates for new buyers?
Not by rule, but renewal letters often start above the rates lenders advertise to win new customers. Your current lender knows that many borrowers sign without shopping. Written offers from other lenders are the most reliable way to close the gap.
Can I renew with a different term than I had before?
Yes. Each renewal is a new term choice. You can move from a five-year fixed to a three-year fixed, a variable rate or an open mortgage, subject to what your lender offers.
Does my credit score change my renewal rate?
If you renew with your current lender, usually not much, because most lenders do not re-qualify you. It matters more when you switch lenders or refinance, because the new lender assesses you as a new borrower.
How early can I lock a renewal rate?
Many lenders allow early renewal without penalty in a window of a few months before maturity, often around 120 days, and many outside lenders offer rate holds of around 90 to 120 days. Ask each lender for its exact window.
Sources
- Financial Consumer Agency of Canada — renewal statements, mortgage rights, the Canadian Mortgage Charter
- Office of the Superintendent of Financial Institutions — Guideline B-20 and the minimum qualifying rate
- Bank of Canada — policy rate decisions and published interest rate data
- Canada Mortgage and Housing Corporation — mortgage loan insurance and homeowner guidance
- Justice Laws Website — the Interest Act and the Bank Act
