Definition
Mortgage renewal is the continuation of your loan at the end of the contractual term (typically 5 years). The outgoing lender sends you an offer 4-6 months before maturity, usually by mail or in branch. If you accept, the contract renews with a new rate and term, with no penalty or legal fees.
This is where the loyalty premium plays out: 60 to 70% of Canadians accept the first offer, while a transfer to another lender typically saves 20 to 50 bps. The cost of a transfer (notary CA$1,200-1,800, appraisal CA$300-500, sometimes covered by the incoming lender) is usually paid back within 6-18 months on a CA$250,000+ balance.
Best practice: 4-6 months before maturity, consult a mortgage broker who will shop 30+ lenders and prepare a comparative file. The mortgage stress test does NOT generally apply to renewals with the same lender (contractual continuation), but does apply to transfers to a new lender — except since November 2024, when OSFI removed this requirement for non-insured transfers (only).