Canadian mortgage renewal guide: what to do 6 months out
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By Editorial team
Six months before a Canadian mortgage term ends, you still have leverage. We modeled a $550,000 Ontario purchase bought five years ago at 3.49% fixed with 20% down. At renewal, the remaining balance is about $379,562. Accepting the lender's posted 6.10% renewal pushes the payment to $2,725/month. A broker-sourced 5.65% quote drops it to $2,629/month, a gap of $96/month and $8,089 more interest over the next 5-year term alone. This guide is for borrowers whose term ends within the next year and want a checklist before the renewal letter arrives.
The scenario modeled
Both calculator tabs share the same original mortgage: $550,000 purchase, $110,000 down, $440,000 borrowed at 3.49% on a 25-year amortization with a 5-year term. After 60 payments, the balance is $379,562. Tab A renews at the posted 6.10% rate; tab B renews at a broker-negotiated 5.65%. All figures use Canadian semi-annual compounding. Taxes, insurance, and prepayments are excluded so the table shows pure P&I.
| Input | Renew at posted 6.10% | Renew at broker 5.65% |
|---|---|---|
| Purchase price (original) | $550,000 | $550,000 |
| Down payment | $110,000 (20%) | $110,000 (20%) |
| Original contract rate (years 1-5) | 3.49% fixed | 3.49% fixed |
| Balance at renewal (month 60) | $379,562 | $379,562 |
| Renewal rate (years 6-10) | 6.10% | 5.65% |
| Remaining amortization | 20 years | 20 years |
| Payment frequency | Monthly | Monthly |
The findings
Shopping the renewal is not cosmetic. On this balance, the posted rate costs $96/month more than the broker quote from month 61 forward. Over the next 5-year term, that rate gap adds $8,089 in interest. Stretch the same spread across the remaining 20-year amortization and lifetime interest rises by $22,896 compared with negotiating the lower rate at renewal.
Your six-month checklist: at month 6 before term end, pull your remaining balance and prepayment privileges from your online banking portal. At month 4, ask your current lender for a renewal offer and a rate-hold window. At month 3, request competing quotes from at least one broker and one alternate lender. At month 1, decide whether to stay (no stress test) or switch (stress test applies), and line up a notary if you are moving the mortgage.
For the payment-shock math when rates jump sharply, see the Canadian renewal shock scenario. For how term length differs from amortization, see amortization and mortgage term in Canada.
| Renew at posted 6.10% | Renew at broker 5.65% | Difference | |
|---|---|---|---|
| Monthly P&I, years 1-5 | $2,194 | $2,194 | Same |
| Monthly P&I after renewal | $2,725 | $2,629 | $96/month more at posted rate |
| Interest over next 5-year term | $106,284 | $98,195 | $8,089 more at posted rate |
| Total interest over 25 years | $345,557 | $322,661 | $22,896 more at posted rate |
Canadian context
Federally regulated lenders must give you a renewal statement at least 21 days before your term ends, but proactive borrowers start earlier. The Financial Consumer Agency of Canada notes that your lender will send renewal paperwork and that you are free to negotiate or take your business elsewhere before the term expires. In practice, most borrowers who shop at least one competing quote save 20-50 basis points off the first offer, which is exactly the spread modeled here between 6.10% posted and 5.65% broker-negotiated.
Source: Financial Consumer Agency of Canada, "Renewing your mortgage," accessed June 2026. URL: https://www.canada.ca/en/financial-consumer-agency/services/mortgages/renew-mortgage.html
When this applies - and when it doesn't
This applies when: you hold a Canadian fixed-rate mortgage whose 5-year term ends within the next 12 months, you have conventional (20%+ equity) or insured financing, and you have stable income to pass a stress test if you switch lenders. Use the six-month runway to compare posted renewal offers against broker quotes and to decide whether a lump-sum prepayment before renewal is worthwhile.
It does not apply cleanly when:
- You hold a variable-rate mortgage. Payment changes may have already happened mid-term. Renewal choices then hinge more on locking in versus staying variable - see fixed vs variable in Canada.
- You need to break the term early. IRD penalties can erase rate savings from switching before month 60. Breaking mid-term is a different calculation than renewal shopping.
- Your income no longer passes the stress test. Staying with your current lender on a straight renewal may be the only path without restructuring the loan or adding a co-borrower.
More renewal planning guides live in the Learn hub Guides section.
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Frequently asked questions
- When should I start preparing for mortgage renewal in Canada?
- Start about six months before your term ends. That window gives you time to request a rate hold from your current lender, collect competing quotes from a mortgage broker, and decide whether switching lenders is worth the legal and appraisal costs. Waiting until the renewal letter arrives often means accepting a posted rate with little room to negotiate.
- Can I renew my mortgage early in Canada?
- Many federally regulated lenders let you renew up to 120 days before your term ends, sometimes with no prepayment penalty if you stay with the same lender. Early renewal can lock in a rate before the Bank of Canada moves again. Confirm the exact window and any conditions with your lender, because policies differ between banks and credit unions.
- Do I need to pass the stress test if I switch lenders at renewal?
- Yes. Switching to a new lender at renewal is treated like a new mortgage, so you must qualify at the higher of your contract rate plus 2% or 5.25%. Renewing with your existing lender on a straight renewal usually does not require re-qualifying under the stress test, which can matter when rates are elevated and your income has not kept pace.
- What happens if I do nothing when my mortgage term ends?
- Your lender will typically roll you into a new term automatically, often at a posted rate that is higher than what you could negotiate. You keep the same lender and amortization schedule, but the payment resets to whatever rate the lender assigns. That default path is almost never the best rate available in the market.
- Should I make a lump-sum prepayment at renewal?
- Renewal is a strong moment to deploy savings if your mortgage allows annual lump-sum prepayments of 10-20% without penalty. A lower balance at renewal reduces both the payment and the interest charged over the next term. Check your prepayment privileges in your original mortgage contract before you send the funds.