The Letter That Costs Canadians the Most Money
Your lender mails a renewal offer a few months before your term ends. It arrives with a rate, a term, and a signature line. Signing it takes thirty seconds, and that convenience is exactly what it is priced for.
Lenders know most homeowners will not shop. The first offer is rarely the best one they can do, and it is almost never the best available in the market. On a $450,000 balance, accepting a rate that is a quarter point too high costs about $60 a month and close to $3,600 over five years.
Why 2026 Is a Big Renewal Year
A large wave of mortgages signed during the low rate period is maturing now. Lenders are competing hard for that business, which puts real negotiating power in your hands if you use it.
Start Four Months Before Your Maturity Date
Most lenders will hold a rate for you 90 to 120 days out. Starting early costs nothing and protects you if pricing moves against you. Waiting until the last two weeks removes every option except signing what you were sent.
Mark the date, then set a reminder four months ahead. That one calendar entry is worth more than most rate hunting.
Know Where Rates Actually Sit
The Bank of Canada held its policy rate at 2.25 percent on July 15, 2026, the sixth consecutive hold, leaving prime at 4.45 percent. Insured 5 year fixed offers have been sitting near 4 percent, with the sharpest variable pricing closer to 3.25 to 3.40 percent.
Compare your renewal letter against those numbers, not against what you paid five years ago. Feeling relieved because the offer beats your neighbour’s story is not research. Our Ottawa mortgage rates 2026 guide tracks where pricing has been moving.
Use the Switching Rule That Works in Your Favour
Since November 2024, the stress test no longer applies to a straight switch. If you move an uninsured mortgage to a new federally regulated lender at renewal without raising the balance or extending the amortization, you do not have to requalify at the higher qualifying rate.
That change matters most for homeowners whose income has changed, who became self employed, or who took on other debt since they first qualified. You can now shop the market without fear of failing a fresh test. Our transfer your mortgage page walks through how the move works.
Negotiate With Your Current Lender, Then Verify
Call your lender and ask for their best rate, not the renewal rate. Many will improve the first offer once they hear you are shopping. Then check that improved number against the market. Sometimes staying wins. Often it does not, and knowing which is the point.
What to Compare Beyond the Rate
- Prepayment privileges, usually between 10 and 20 percent per year
- The penalty formula if you break the term early
- Whether the mortgage is portable if you move
- Any fees the new lender covers on a transfer
Match the Term to Your Actual Plans
If you may sell within two years, a five year fixed can create a large penalty. If you want certainty and plan to stay, locking in makes sense. Three year terms have become popular in Ottawa because they balance both concerns while the 2027 rate picture is unclear.
Consider Whether a Refinance Serves You Better
Renewal is the cheapest moment to restructure. If you are carrying credit card balances at nearly twenty percent, folding them into your mortgage can cut hundreds from your monthly obligations. That path is a refinance rather than a switch, so the stress test applies and legal costs are higher. Our guide on when refinancing makes sense in the 2026 market covers the math.
Keep Your Credit Clean in the Months Before
Even on a straight switch, the new lender pulls your credit. Avoid new loans, keep balances under thirty percent of your limits, and never miss a payment in the final year of your term.
Frequently Asked Questions
Can I change lenders at renewal without penalty?
Yes. Moving on your maturity date carries no prepayment penalty. Penalties only apply when you break a term early.
What does it cost to switch lenders at renewal?
Typically a discharge fee plus legal and registration costs, though many lenders cover these to win your business. Bank Street Mortgage will tell you upfront whether your switch is free.
Do I have to requalify to renew with my current lender?
No. A straight renewal with your existing lender does not require requalification, which is why some borrowers with weaker files choose to stay.
How early should I start shopping?
Four months out. That gives time to compare offers, hold a rate, and complete a switch before your maturity date.
Is a variable rate a good idea at renewal in 2026?
It depends on your budget and plans. Variable is cheaper today and carries a smaller break penalty, while fixed removes uncertainty. Bank Street Mortgage prices both so you can compare real payments.
What happens if I do nothing?
Your lender may roll you into a short term or posted rate that is well above market. That is the most expensive outcome available.
Thirty Seconds of Convenience or Five Years of Savings
The renewal letter is designed to be easy, not to be your best deal. Comparing offers takes a few conversations, the switching rules now protect you, and lenders are actively bidding for renewal business this year. Homeowners who shop typically save more in one afternoon than they will from a year of cutting small expenses. Set the reminder, ask for numbers, and sign only after you have seen what else is out there.
Renewal date approaching? Send Bank Street Mortgage your details and we will show you what other lenders would offer before you sign anything.