renewal

When to Start Your Mortgage Renewal (Hint: 120 Days Early)

Published July 2, 2026 · By YYZ Mortgage

Is your mortgage up for renewal in the next year? Then here is the best tip we can give you. Start early — about 120 days before your maturity date. Your maturity date is the day your current term ends. The 120-day mark is when most lenders will hold a rate. Start then, and you shop with time on your side. Wait, and you may just sign what lands in your mailbox.

This guide walks you through the full renewal timeline in Ontario. It shows why banks quietly win when you start late. And it helps you choose your path: stay, switch, or refinance.

Why 120 days is the magic number

Most lenders in Canada will hold a rate for you. The hold lasts up to 120 days before your renewal date. Your old term just ends on its own at maturity. So there is no penalty to line up a new mortgage now. It can be with your current bank or a new lender. It just starts the day the old one ends.

Starting at 120 days gives you three things:

You are protected. If rates rise before your term ends, you keep your locked rate.
Room if rates fall. Most lenders will let you take the lower rate before closing.
Time. You get four months to compare lenders, gather papers, and push for a deal. That beats a rushed choice with a 30-day deadline.

Here is where rates stand right now. As of July 2026, the Bank of Canada’s policy rate is 2.25%. That follows five holds in a row. Prime is 4.45%. Strong borrowers are seeing 5-year fixed rates around 3.94%. Yet big-bank posted 5-year rates are 6.09%. (As of July 2026, OAC — on approved credit — and subject to change.) See the gap between posted rates and the best rates? That is exactly why shopping your renewal pays off. You can see current options on our rates page.

Why banks count on auto-renewal

Renewal is where lenders make some of their easiest money. Here is the pattern:

The letter comes late. Most banks send renewal offers about 30 days before maturity. By then, the 120-day shopping window has been open for months.
The offered rate is rarely the best rate. Renewal letters often quote more than the same bank gives new clients. Why? Current customers sign at high rates far more often than new ones do.
Doing nothing helps the bank. Signing the letter takes two minutes. Shopping takes work. Lenders know most people take the easy path. That is why so many people renew without asking questions.
Skip it all, and you are auto-renewed. Does your term end with no signature? Then most lenders roll you into a short-term or posted-rate product. That is often the priciest option there is. Breaking it later means a penalty.

None of this is a trick. It is just how the money flows. The fix is simple. Start the process on your schedule, not the bank’s.

What a rate gap really costs

Illustrative example: say a GTA homeowner renews a $500,000 balance. They have 25 years of amortization left. That is the time to pay the whole loan off. The bank’s renewal letter offers 4.39%. A broker finds 3.94% somewhere else. (Both as of July 2026, OAC, subject to change.) The payment gap is about $120 a month. That is over $7,000 in payments across a five-year term. Your own savings depend on your balance, payoff time, and file. But the idea holds at any size. Small rate gaps add up to big money. Run your own numbers with our mortgage payment calculator.

Renewing in the next 4–6 months? Get a free renewal review. We will check your lender’s offer against the market. All before you sign a thing.

Renewal vs. refinance: which one do you need?

People mix these two up all the time. The rules differ, so the difference matters.

A renewal keeps your balance and your payoff timeline about the same. You just pick a new term and a new rate. You can stay with your lender or move to a new one. It is the simpler deal.

A refinance swaps your mortgage for a bigger one. Or it changes how the loan is set up. You can borrow up to 80% of your home’s value. People refinance to fix up the home or pay off costly debt. Some do it to stretch out payments. A refinance means you must fully qualify again, stress test included. Done mid-term, it also triggers a prepayment penalty. Done at renewal, there is no penalty at all. Want to make changes? The end of your term is often the cheapest time. There is more in our refinance guide. Or see how parents use home equity for their kids. Read refinancing to help your kids buy a home.

A quick rule of thumb. Want only a better rate on what you owe? Renew. Want to change how much you owe, or how the loan works? Refinance — and time it for your maturity date if you can.

Switching lenders at renewal: easier than most people think

The biggest renewal myth is that switching lenders is a big hassle. In truth, renewal is the easiest time to move:

No prepayment penalty. Your term is ending anyway.
Costs are often covered. On a standard switch, the new lender usually pays the legal and appraisal fees. Or it offsets them.
Your payoff timeline carries over. A straight switch keeps your current schedule. You are not restarting the clock.

What about the stress test?

Here is where the 2024 rule changes help you. A straight switch means same balance, same amortization, just a new lender. Those generally do not need to re-pass the stress test. That covers insured and insurable mortgages. Federal rules changed in late 2024 for this very reason. People renewing should not be trapped with one lender.

Two things are worth knowing. First, details can vary by lender. They also vary by how your mortgage was set up (insured, insurable, or uninsured). Second, what if you raise the loan or stretch the timeline? Then it becomes a refinance. Full qualifying — stress test included — applies. A broker can tell you which rules fit your file in one short call.

Papers you will need to switch

Your most recent mortgage statement (or renewal letter).
Proof of income. A recent pay stub and a job letter, or two years of tax papers if self-employed.
Property tax statement.
Government-issued ID.
Proof of home insurance.

That is usually it. The new lender and your broker handle the rest.

Your renewal timeline checklist

~180 days out — get set

Find your maturity date, current rate, and balance. They are on your mortgage statement.
Check your prepayment room. Got spare cash and lump-sum room? Paying some down now shrinks your balance. Next term, you pay interest on less.

120 days out — start shopping

Call a broker, or start comparing lenders yourself.
Lock in a rate hold. If rates drop before closing, most lenders let you take the lower rate. If rates rise, you are protected. The Bank of Canada has more 2026 rate dates coming. They fall on July 15, September 2, October 28, and December 9. A 120-day hold can span two or three of those dates. That is real insurance either way.
Decide if you also want to refinance. That can take out equity or roll up debt. It can also change your payoff timeline.

90 days out — decide

Compare your current lender’s offer with the market. If your lender matches the best rate, staying is fine. The point is to choose, not to switch for its own sake.
Switching? Send in your file now. That leaves lots of time.

60 days out — paperwork

The new lender checks your papers. It orders an appraisal if needed. Then it gets things ready.
Staying put? You have likely signed your renewal by now — on your terms, not the letter’s.

30 days out — confirm

The bank’s renewal letter arrives around now. If you did the work above, it is just one more data point.
Confirm the closing details. The new mortgage should fund on your maturity date.

Maturity day — the old term ends and the new one begins. Nothing auto-renews without your say-so.

Late start? You still have options

Inside 30 days, you can still switch. Brokers rush renewals all the time. But you lose bargaining power and breathing room. Has your mortgage already auto-renewed? Ask about a grace period. Some lenders give a short window after maturity. It is often about 30 days. In that window, you can switch with no penalty. Check your papers, or have a broker check for you.

The bottom line

Set a reminder for 120 days before your maturity date. Shop before the renewal letter shows up. Treat that letter as an opening offer, not a final word. Want bigger changes? Use the penalty-free moment at maturity. Stay or switch — the goal is the same either way. Make a real choice, not a default one.

Is your renewal coming up? Talk to us. We are an FSRA-licensed brokerage. (FSRA is Ontario’s regulator for financial services.) We are part of the Dominion Lending Centres network. A renewal review costs you nothing.

The rule change that freed renewal shoppers (November 2024)

For years, the biggest renewal trap was one you could not see. To switch, uninsured borrowers had to re-pass the stress test. The new lender had to run it. That meant qualifying at their contract rate plus 2%. Many homeowners paid their mortgage on time, every time. But on paper, they could not requalify. So they were stuck with whatever their own bank offered.

That ended on November 21, 2024. A straight switch at renewal means the same loan amount. It also means the same remaining amortization. Those switches are now exempt from the stress test. That holds for insured and uninsured mortgages alike. Your bank knows whether you know this. A letter priced for a stuck customer looks different. Now you can walk across the street. That is exactly the leverage a free renewal review uses. But note the line. Add money or stretch the timeline, and it becomes a refinance. Full requalifying applies. Run your own numbers with the renewal savings calculator.

This article is general information, not financial, legal or tax advice. Mortgage products are subject to lender approval (OAC). Rates and product details change — confirm current terms before deciding. Speak with a licensed mortgage professional about your situation.

Frequently asked questions

How early can I lock in a rate for my mortgage renewal?

Most lenders will hold a rate for up to 120 days before your maturity date. There is no penalty to set up a renewal or switch that starts when your current term ends. Starting at the 120-day mark protects you if rates rise. With most lenders, you can still take a lower rate if rates fall before closing.

Do I have to pass the stress test again if I switch lenders at renewal?

For a straight switch — same balance, same amortization, just a new lender — insured and insurable mortgages generally no longer need to re-pass the stress test. That follows federal rule changes in late 2024. Rules can vary by lender and by how your mortgage is set up. A broker can confirm which rules apply to your file before you commit.

What happens if I do nothing when my mortgage term ends?

Most lenders will renew you automatically. That often means a short-term or posted-rate product that costs more than what you could get by asking. Once you are in the new term, breaking it triggers a prepayment penalty. A calendar reminder 120 days before maturity is the simplest way to avoid this.

Is switching lenders at renewal expensive?

Usually not. Your term is ending, so there is no prepayment penalty. On a standard switch, the new lender often covers or offsets legal and appraisal costs. In most cases, your main job is paperwork: a mortgage statement, proof of income, a property tax bill, and government ID.

Should I renew or refinance?

Renew if you only want a good rate on what you owe now. Refinance if you also want to borrow more against your equity, roll up debt, or change your amortization. Refinancing means you must fully qualify again. But doing it at renewal avoids the prepayment penalty you would pay mid-term.

My bank sent a renewal offer. Is it their best rate?

Often it is not. Renewal letters usually go out about 30 days before maturity. They often quote rates above what the same bank gives new customers, because banks count on people just signing back. Compare the offer against the wider market — or have a broker do it — to know if it is fair.

Do I have to pass the stress test to switch lenders at renewal?

No — not anymore. Since November 21, 2024, straight switches at renewal (same loan amount, same amortization) are exempt from re-passing the stress test. That covers both insured and uninsured mortgages. Only refinances that increase the amount or the amortization need full requalifying.

This content is general information, not financial, legal or tax advice. Mortgage products are subject to lender approval (OAC). Speak with a licensed mortgage professional about your situation.