The case for staying
No re-qualification, no appraisal, no legal work, no stress test in most cases. If your income has dropped, your credit has bruises, or the property would appraise poorly today, staying put may be the only low-risk option. Certainty has real value when the file has weakened.
The case for switching
New lenders compete hardest for renewal switches, often covering transfer costs and offering their sharpest pricing. Over a five-year term, even a modest rate gap on a Toronto-sized balance adds up to several thousand dollars. If your file is strong, loyalty is an expensive habit.
- New lender frequently pays legal and appraisal fees
- Better prepayment privileges may come with the new mortgage
- A broker can run both options on the same day
Watch for the collateral charge trap
Some lenders register mortgages as collateral charges, which cannot be switched directly to another lender without a full refinance and its costs. Check how your mortgage is registered before assuming a switch is simple. Your current lender's discharge statement will show it.
The middle move: negotiate, then decide
Get a real written quote from a competitor first. Take it to your current lender. If they match it, staying costs you nothing. If they will not, you have your answer. Either way you made the decision with numbers on the table instead of habit.
Frequently asked questions
- Does switching lenders hurt my credit?
- A single mortgage inquiry has a minimal, temporary effect. Multiple mortgage inquiries within a short shopping window are generally treated as one.
- How long does a switch take?
- Typically two to four weeks from application to transfer, so start well inside your one hundred and twenty day window.
- Can I switch if my mortgage is insured?
- Yes. Insured mortgages transfer between lenders, and the existing insurance usually carries over under recent rule changes.