The rules
Switching mortgage lenders at renewal: the rules in Canada
Written by Stonefield Mortgage · Reviewed by David Steinfeld, principal broker · Stonefield Mortgage, FSRA mortgage brokerage licence #13722 · [review pending — before this page is indexed]
Published · Updated
In Canada, you can move your mortgage to another lender when your term ends without paying a prepayment penalty. Since November 21, 2024, an uninsured mortgage that moves to another federally regulated lender without a larger amount or a longer amortization does not need to pass the stress test (source: OSFI letter dated November 21, 2024, checked October 2026). The new lender still has to approve you.
No penalty at maturity
A prepayment penalty is the charge for breaking your contract before the term, the contract period, ends. When the term ends, the contract has run its course, so you can renew, switch or pay the mortgage off without that charge. Switching before maturity is different: a penalty usually applies, as our page on prepayment penalties explains.
The straight-switch rule
The stress test means qualifying at the greater of your contract rate plus 2 percentage points or 5.25%, the stress-test floor, which OSFI reviews at least once a year (source: OSFI, Minimum qualifying rate for uninsured mortgages, page modified January 29, 2026, checked October 2026).
OSFI set out the switch rule in a letter dated and effective November 21, 2024, titled "OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits". In the letter, OSFI said it does not expect the stress test to be applied when an uninsured mortgage moves to another federally regulated lender at renewal without increasing the amount or the amortization. The amortization is the total time to pay the loan off. OSFI's minimum qualifying rate (MQR) page still reflects the straight-switch exemption.
Insured mortgages, the ones with default insurance, can also switch at renewal without re-qualifying. The Canadian Mortgage Charter lists the insured switch among its expectations for federally regulated lenders (source: Financial Consumer Agency of Canada briefing note "The Canada Mortgage Charter", page dated September 9, 2025).
The new lender still decides
Skipping the stress test is not skipping the application. FCAC's page "Renewing your mortgage" (page dated October 15, 2025) says the new lender must approve you and may use different criteria from your current lender. The new lender still reviews your credit, income and property, and any switch is subject to lender approval.
OSFI's letter speaks to federally regulated lenders. If the lender you are moving to is an Ontario credit union, which is provincially regulated, ask it how it qualifies a switch.
What switching lenders can cost
FCAC's page "Renewing your mortgage" says switching costs can include set-up fees with the new lender and an appraisal fee. The FCAC page also says you can ask the new lender to cover some or all of those costs. Ask your current lender, too, whether it charges anything to release the mortgage.
A switch pays when the saving over the term is larger than the costs.
What turns a switch into a refinance or makes it more involved
- Borrowing more or stretching the amortization. Either change makes the switch a refinance. You qualify again at the greater of your contract rate plus 2 percentage points or 5.25%, the stress-test floor OSFI reviews at least once a year.
- A collateral charge. Some lenders register the mortgage as a collateral charge, a registration that can secure more than the mortgage itself. A collateral charge can generally make switching at renewal more involved, so ask your lender how your mortgage is registered.
Sources
- OSFI — OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits, dated 2024-11-21, checked 2026-10-26.
- OSFI — Minimum qualifying rate for uninsured mortgages, page modified 2026-01-29, checked 2026-10-26.
- Financial Consumer Agency of Canada — Renewing your mortgage, page dated 2025-10-15, checked 2026-10-26.
- Financial Consumer Agency of Canada — The Canada Mortgage Charter (briefing note, February 13, 2024), page dated 2025-09-09, checked 2026-10-26.
What to do next
To see whether a switch pays once costs are counted, try the renewal vs switch tool; results are estimates only, not an offer or advice. Or bring your renewal letter to Can your bank do better? and we will compare your renewal letter with the lenders we work with, subject to lender approval.
Common follow-up questions
Can I switch before my term ends?
Yes, but you will usually pay a prepayment penalty. On a fixed-rate mortgage, FCAC says the penalty is usually the higher of three months' interest or the interest rate differential, and your contract governs.
Does a straight switch involve a credit check?
Generally yes, because a straight switch is a new application and the new lender must approve you. Our page on credit checks at renewal covers how the inquiry is treated.
Can I ask my current lender to match instead?
Yes. FCAC says you can negotiate with your current lender and may qualify for a discounted rate lower than the rate quoted in your renewal letter. See what the retention desk can do.
This page is general information for Ontario readers, not financial, legal or tax advice. Public rules on this page were checked on 2026-10-26; your mortgage contract governs. Every mortgage is subject to lender approval.