Mortgage Renewal in Ontario

Your renewal letter shows a rate and a signature line. It does not show what that lender offers new clients this week, what a competing lender would pay to take the file, or what the same payment would look like on a different term or amortization.

On a $600,000 balance, a difference of half a percentage point is roughly $160 a month and thousands of dollars over a five year term. That is the value of one phone call before you sign.

Since the federal rules changed, borrowers making a straight switch at renewal, meaning the same balance and the same amortization, no longer need to requalify under the stress test with the new lender. That removed the single biggest reason people stayed put.

On most switches the incoming lender covers the legal and appraisal costs. What you should still check is whether your current lender charges a discharge or assignment fee, which is typically modest but should be in the math before you decide.

There is no prepayment penalty at maturity, which makes renewal the one moment you can change almost anything at no cost: term length, fixed against variable, payment frequency, amortization, or rolling higher interest debt into the mortgage.

We model the renewal three ways before recommending anything: lowest payment today, lowest total interest over the term, and fastest path to mortgage free. Which one wins depends on what you are planning in the next five years, which is exactly what the mailed letter cannot know.