What does switching mortgage lenders cost?

In Canada, switching lenders at the end of your term carries no prepayment penalty. There can be smaller costs, such as a discharge fee from your current lender, legal or title costs to register the new mortgage, and sometimes an appraisal. Some lenders cover part of these costs on a switch, so compare the whole offer, not just the rate.

The costs of switching lenders

• Discharge or administration fee: your current lender may charge a fee to release its mortgage from your title.
• Legal and registration costs: the new mortgage has to be registered. Some lenders use their own legal process at no charge to you on a straight switch; others leave you to hire a lawyer.
• Appraisal: the new lender may need to confirm your home's value. Some lenders pay for the appraisal; some ask you to.
• Title insurance: the new lender may require title insurance.

None of these switching costs is set by public rule, and they vary between lenders. Ask each lender which costs it covers before you compare offers.

Costs you avoid at maturity

At the end of your term, you do not pay a prepayment penalty to move. Before maturity, the penalty on a fixed mortgage is usually the higher of three months' interest or the interest rate differential (source: Financial Consumer Agency of Canada, checked October 2026). On a variable mortgage the penalty is commonly three months' interest.

A mid-term penalty is often the largest switching cost of all, which is why timing matters.

You also avoid the stress test on a straight switch. Since November 21, 2024, OSFI does not expect the stress test when an uninsured mortgage moves to another federally regulated lender without increasing the amount or amortization. Insured mortgages can also switch at renewal without re-qualifying (source: Canadian Mortgage Charter, Financial Consumer Agency of Canada briefing note, checked October 2026).

A worked comparison of rate saving and switching costs

These figures are illustrative only, not quotes.

On a $400,000 balance, a difference of a quarter of a percentage point in rate is about $1,000 a year in interest, before compounding and amortization effects. If switching costs you $800 in fees after the new lender's contribution, the switch pays for itself within the first year. If the gap is smaller, or your costs are higher, staying may be the better choice.

The rate is only part of the comparison. Also compare the term, prepayment privileges, how the lender calculates its penalty, and whether you can move the mortgage to a new home.

When staying makes sense

Your current lender's renewal offer is one offer, not the only one. The renewal offer may still be competitive, especially if you ask for your lender's retention offer. If staying is the better deal, we say so. Switching for a small rate difference is not always worth the effort.

What to do next

To compare staying and switching with your own numbers, try the renewal vs switch tool; results are estimates only, not an offer or advice. Or use our call-me-back form and we will compare offers for you.