How to read a mortgage renewal letter (Ontario)

What a renewal letter has to include, and when your lender contacts you

Federally regulated lenders, such as the banks, must send a renewal statement at least 21 days before your term ends, or tell you they will not renew. The statement shows the balance at the renewal date, the interest rate, the payment frequency, the term and any charges or fees that apply. The statement also says the offered rate will not increase before the renewal date (source: Financial Consumer Agency of Canada, checked October 2026).

Ontario credit unions are provincially regulated, so that federal rule does not cover them.

Under the Canadian Mortgage Charter, federally regulated lenders are also expected to contact you about renewal options four to six months ahead (source: Financial Consumer Agency of Canada, checked October 2026). The Charter is a set of expectations, not a law.

The renewal letter, line by line

Click any line of the sample letter to see what the line means and what to ask.

Principal balance at renewal

The principal balance at renewal is what you will still owe on the renewal date. Every option, whether you renew, switch or refinance, starts from this number. Ask: "Is this the balance on the renewal date itself, after my last payment?"

Interest rate offered

The interest rate offered is the rate your lender is offering for the new term. The offered rate is your lender's offer, not a requirement. The Financial Consumer Agency of Canada notes that if you negotiate, you may qualify for a discounted rate lower than the one in the letter (checked October 2026).

Illustrative, not a quote: on a $400,000 balance, 0.10 percentage points is about $400 of interest in the first year ($400,000 × 0.10 ÷ 100). Ask: "Is this the most competitive rate you can offer for this term?"

Term

The term is how long the rate and conditions last. A closed term means a penalty if you break the mortgage early; an open term lets you pay the mortgage off at any time, generally at a higher rate. Ask: "What would a shorter term, or a variable rate, look like instead?"

Remaining amortization

The remaining amortization is the time left until the mortgage is fully repaid at this payment. A longer amortization lowers the payment, and you pay interest for longer. Ask: "Is this the same amortization I had, and what would my payment be if I shortened it?"

Payment and frequency

The payment and frequency line shows what you will pay and how often. Accelerated bi-weekly payments generally pay the mortgage off sooner, because they add up to one extra monthly payment a year. Ask: "Can I change the payment frequency, or make a lump-sum payment at renewal, without a fee?"

Reply-by date

The reply-by date is the date your lender needs your answer. Many borrowers start comparing well before the reply-by date, because a new lender needs time to approve you and to move the mortgage. Ask: "What happens if I don't sign by this date?"

Fees and charges

The fees and charges line shows any fee to renew. Switching to another lender at maturity has its own costs. The Financial Consumer Agency of Canada says switching costs can include set-up fees with the new lender and an appraisal fee. FCAC adds that you can ask the new lender to cover some or all of those costs (checked October 2026). Ask: "Are there any fees to renew, or to discharge the mortgage if I move at maturity?"

Prepayment privileges

Prepayment privileges cap the extra you can pay each year, by raising your payment or with a lump sum, without a charge. Paying more than the maximum allows means a prepayment penalty (source: Financial Consumer Agency of Canada, checked October 2026). Ask: "What are my yearly prepayment limits on the new term?"

What a renewal letter often leaves out

The penalty method

Your renewal letter tells you the rate, not what breaking the new term would cost. On a fixed mortgage the penalty is usually the higher of three months' interest or the interest rate differential (IRD), and lenders may use posted rates to work out the penalty (source: Financial Consumer Agency of Canada, checked October 2026).

Under the federal Code of Conduct on prepayment information, federally regulated lenders explain how the charge is calculated and give a written statement of the charge on request. Ask: "How is the penalty calculated on this term, and which rate do you compare against?" See posted vs discounted.

Portability

Portability is whether you can take the mortgage to a new home if you sell during the term. Porting generally works within the lender's time limits. Ask: "Is this term portable, how long do I have between sale and purchase, and can I add money?"

Charge type

Your mortgage is registered on your title as either a standard or a collateral charge. The charge type is set when the mortgage is first registered, not at renewal, and a collateral charge can make switching at renewal more involved. Ask: "Is my mortgage registered as a standard or a collateral charge, and for what amount?"

If you do nothing with your renewal letter

The Financial Consumer Agency of Canada warns: "If you don't take action, the renewal of your mortgage term may be automatic." A lender that plans to renew you automatically says so in the statement (checked October 2026).

Sources

• Financial Consumer Agency of Canada — Renewing your mortgage, page dated 2025-10-15, checked 2026-10-26.
• Financial Consumer Agency of Canada — Reduce prepayment penalties, checked 2026-10-26.
• Financial Consumer Agency of Canada — Paying off your mortgage faster, page dated 2025-10-15, checked 2026-10-26.
• Financial Consumer Agency of Canada — Code of Conduct for Federally Regulated Financial Institutions, Mortgage Prepayment Information, page dated 2025-09-24, checked 2026-10-26.
• Financial Consumer Agency of Canada — Canadian Mortgage Charter briefing note, page dated 2025-09-09, checked 2026-10-26.

What to do next

Enter the numbers from your letter in the offer check, then send them to us. A person checks the offer against the lenders we work with and replies within one business day. Bring our written offer back to your bank; if your bank matches our written offer, you stay and pay less. Or start at Can your bank do better.