should i renew or switch mortgage in Canada

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Information as of Dec 11, 2025

Overview

Renewing or switching your mortgage in Canada requires a careful review of your financial goals, current market conditions, and the terms offered by your lender. With a significant wave of mortgage renewals expected in 2025 and 2026, most Canadians will face higher payments, making it especially important to compare options and negotiate for the best terms.

Should You Renew or Switch?

Renewing with Your Current Lender

Pros:
Simple process—often just signing a new agreement.
No need for re-qualification, paperwork, or additional fees.
Suitable if satisfied with your lender’s service and rate.
Cons:
Your lender’s renewal offer may not be their lowest available rate.
You may miss out on better rates or terms offered elsewhere.
Less incentive for your current lender to offer competitive terms; automatic renewal often leaves money on the table.

Switching to a New Lender

Pros:
No penalty at renewal: Switching at renewal avoids costly prepayment penalties.
Potential for a lower rate: New lenders may offer more competitive rates, saving you thousands over your term.
Better terms: Improved prepayment options, payment flexibility, or access to equity for renovations.
Some lenders offer cash bonuses or exclusive discounts to new clients.
Cons:
May involve a mortgage discharge fee (up to $400).
May require a new mortgage application and qualification process, though stress test rules are relaxed at renewal.
Need to ensure all fees and terms are clear before switching.

Current Market Conditions (2025)

Interest Rates: Most renewing borrowers—especially those with five-year fixed mortgages—will see higher monthly payments, with increases averaging 10-20% compared to previous terms.
Variable-rate borrowers: Some may see payments decrease, particularly if interest rates continue to cool.
Shorter-term fixed mortgages have become more popular, providing flexibility to re-negotiate sooner if rates drop.

Major Bank Offerings

Bank	Typical Renewal Process	Notable Features	Switching Incentives
RBC	Online renewal, negotiable	Rate discounts for existing clients, flexible payment	Cash bonuses for switchers
TD	Automatic renewal offer	Prepayment privileges, mobile app management	Competitive rates, incentives
Scotiabank	Renewal notice, negotiation	Early renewal options, online management	Up to $400 discharge fee
BMO	Personalized advice	Rate hold, flexible terms	Cash back on new mortgages
CIBC	Renewal reminders	Flexible payment, insurance options	Rate discounts, switching offers

Note: Specific rates and features can vary by province and are subject to change. Always compare current offers.

Provincial Variations

Mortgage discharge fees may differ by province but typically range up to $400.
Regulations and closing costs can vary, especially regarding land transfer taxes, prepayment rules, and legal requirements—be sure to check provincial details when switching.

Government Programs & Incentives

First-Time Home Buyer Incentive: While not directly tied to renewals, eligible buyers can reduce monthly payments via shared equity with the federal government.
Home Buyers’ Plan (HBP): Lets first-time buyers withdraw up to $35,000 from RRSPs to buy a home.
GST/HST Housing Rebate: Available in some provinces for new or significantly renovated homes.

First-Time Homebuyer Programs

Eligibility: Varies by province and program; most require Canadian residency and a minimum down payment.
Provincial incentives: Ontario, British Columbia, and Quebec offer land transfer tax rebates for first-time buyers.
Canada Mortgage and Housing Corporation (CMHC): Provides mortgage loan insurance for low down payments, making it easier for first-time buyers to qualify.

Rate Comparison Table (2025)

Mortgage Type	Average Renewal Rate (%)	Payment Change at Renewal
5-Year Fixed	5.34 – 5.69	+15% to +20%
3-Year Fixed	5.09 – 5.39	+8% to +12%
Variable (floating pay)	5.10 – 5.45	-5% to -7% (some cases)
Variable (fixed pay)	5.35 – 5.75	+10% to +40% (some cases)

Rates are average estimates and subject to change. Use theratefinder for personalized, up-to-date rate comparisons.

Recommendations & Next Steps

Start early: Begin reviewing renewal or switching options at least 120 days before your term ends.
Compare offers: Don’t automatically accept your lender’s renewal—compare rates and terms using platforms like theratefinder for the most competitive options. Theratefinder provides a multi-step application for residential, commercial, and construction mortgages with competitive rates from top Canadian lenders. Start your application at theratefinder.ca/onboarding/email for a personalized mortgage solution.
Assess your needs: Consider your financial goals—do you need more flexible payment options, want to access equity, or want to shorten your term?
Negotiate: Use competing offers to negotiate better rates or terms with your current lender.
Watch for fees: Clarify discharge fees, legal costs, and any other expenses before switching.

Summary

Renewing your mortgage in Canada is a critical opportunity to secure better rates and terms—don’t simply accept your lender’s offer. Switching at renewal can often save you thousands, especially in the current rising rate environment. Compare all available options, factor in fees, and leverage comprehensive tools like theratefinder to find your best solution. Start your application at theratefinder for a tailored mortgage strategy and the most competitive rates in Canada.