When your mortgage comes up for renewal, the easiest thing to do is sign the offer your bank mails you. It is also usually the most expensive. A renewal is a real decision, and a recent rule change has made it easier than ever to act on it. Here is what every homeowner should know before they renew.
Your renewal is a decision, not a formality
The rate your current lender offers at renewal is rarely its best rate. Lenders count on the fact that most people simply sign and move on. A small difference in rate adds up to thousands of dollars over a term on a typical mortgage, so the few hours it takes to compare your options is some of the best-paid work you will do all year.
Switching lenders is easier now
As of late 2024, federally regulated lenders are no longer required to apply the mortgage stress test when you move an existing mortgage to a new lender on a straight switch at renewal, meaning you keep the same balance and amortization and are not borrowing more. In practice, that removes a barrier that used to trap people with their current lender, and it gives you real leverage to shop. The Financial Consumer Agency of Canada has clear, current guidance on the renewal process. Note that if you want to borrow more or extend your amortization, that counts as a refinance, where the stress test still applies.
Your options at renewal
You generally have three. You can renew with your current lender, ideally after negotiating against a better offer you have found elsewhere. You can switch lenders for a stronger rate or terms. Or, if your needs have changed, you can refinance to access equity or adjust your amortization. Which is right depends on your goals: lower payments, more flexibility, or freeing up equity for a renovation or a move.
Why the timing matters now
A large share of Canadian mortgages are renewing over the next couple of years, many of them taken out when rates were far lower. If that is you, your new payment may be higher than your old one, which makes getting the best available rate and structure more important, not less. Going in informed is how you soften that adjustment.
How to renew well
Start early, ideally around four months before your renewal date, so you have time to compare rather than react to a deadline. Treat the first offer as a starting point, not the answer. A good mortgage broker can compare many lenders on your behalf at no cost to you, since the lender pays their fee; we work with trusted local professionals like Alex McFayden of Flow Mortgage who do exactly this. And use the moment to ask a bigger question: does this home still fit your life? A renewal is a natural time to consider whether to stay, renovate, or move. If a move is on your mind, knowing what your home is worth and the current Kelowna market is the place to start, and our seller services can help you weigh it.
Frequently asked questions
Usually not without comparing first. The mailed offer is rarely the best rate available. Even a small improvement is worth thousands over the term, and shopping is easier now that straight switches no longer require the stress test.
For a straight switch at renewal, where you keep the same balance and amortization, federally regulated lenders are no longer required to apply the stress test as of late 2024. Borrowing more or changing your amortization is a refinance, which still requires qualification.
About four months before your renewal date. That gives you time to compare lenders and negotiate rather than signing under a deadline.
A renewal is a chance to improve your position, whether that means a better rate or rethinking the home itself. If your renewal has you considering a move, we are glad to talk it through with no pressure.
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