The renewal letter is an offer, not a verdict
Your lender mails a renewal offer a few months before maturity, and signing it takes one click. That convenience is the point: lenders know most borrowers sign, so the renewal offer usually is not the sharpest number they have. Treating renewal as a shopping moment - the same way you shopped the original mortgage - is the single easiest way to lower your payment.
Start 120 days out
Most lenders will hold a rate for you up to 120 days before maturity. That window lets us collect documents, order any appraisal, and complete a switch without rushing your maturity date. Starting late is what pushes people into signing whatever arrives in the mail.
- 120 days out: gather your renewal letter, mortgage statement, and property tax bill
- 90 days out: compare your lender's offer against the market and decide
- 45 days out: paperwork and, if switching, the new lender's approval
Switching lenders vs staying put
A straight switch moves the same balance and remaining amortization to a new lender at maturity. There is no penalty for switching at maturity, and many lenders cover part or all of the legal and appraisal costs to win the business. You do have to requalify, including the stress test, which is why a switch is not automatic for every file.
- Switch: no penalty at maturity, requalification required, costs often covered by the new lender
- Stay: no requalification at most lenders, but you need to negotiate rather than accept
- Refinance at renewal: needed only if you are adding to the balance or changing amortization
Things worth changing at renewal
Renewal is the cheapest moment to restructure, because there is no penalty. It is worth asking whether the mortgage you are renewing into still matches your plans for the next few years.
- Fixed vs variable, and the term length that matches how long you will hold the property
- Shortening the amortization if cash flow allows, to cut lifetime interest
- Adding prepayment privileges or a readvanceable line for future flexibility
- Consolidating high-interest debt into the mortgage while there is no penalty
If you might not requalify
Income changes, a new business, or a credit event can make a switch harder. In that case staying with your existing lender may be the right answer, because most lenders renew existing borrowers without a full requalification. We will tell you honestly which side of that line your file sits on before you make a move.
Frequently asked questions
- When should I start my mortgage renewal in Toronto?
- About 120 days before maturity. That is the longest rate hold most lenders offer and leaves enough time to switch lenders without pressure.
- Is there a penalty to switch lenders at renewal?
- No. At maturity you can move the same balance to another lender without a prepayment penalty. There may be a small discharge or registration fee, which many new lenders cover.
- Do I have to requalify to switch lenders?
- Yes, a switch is a new approval, including the stress test. Staying with your current lender generally does not require requalification.
- Can I add money to my mortgage at renewal?
- Adding to the balance makes it a refinance rather than a straight switch, which means an appraisal and an 80% loan-to-value limit - but no penalty, since you are at maturity.
- What happens if I do nothing at renewal?
- Most lenders roll you into an open or posted-rate term, which is usually the most expensive option available. Never let a maturity date pass unattended.
- Should I choose fixed or variable at renewal?
- It depends on your tolerance for payment movement and how long you plan to hold the property. We show both scenarios with actual payments rather than guessing where rates will go.