Renewal season
Mortgage Renewal vs Refinance in Toronto: How to Choose in 2026
Renewing keeps your current balance and amortization. Refinancing rewrites the mortgage — and unlocks options.
What renewal actually means
At the end of your term (typically 5 years) your mortgage matures. You don't pay off the balance — you sign a new term at whatever rate and conditions you negotiate. Most banks send a renewal letter 30–45 days before maturity with a 'posted' rate that is almost never their best rate.
When refinancing makes more sense
Refinancing breaks and rewrites the mortgage. You'd typically refinance to access home equity, consolidate higher-interest debt into the mortgage, extend your amortization to lower payments, or remove someone from title (divorce, partnership change).
Refinancing requires a full application and stress test. If you have lots of equity but income has changed, an experienced broker can structure the refinance with a lender that fits your current profile.
Switching lenders at renewal — usually the smart move
At renewal there is no early payout penalty. Moving the same balance and amortization to a new lender is called a 'switch' or 'transfer' and is often free or very low cost. A broker will compare your bank's renewal offer against monoline lenders and credit unions to find the strongest 5-year total cost.
- Start 120 days before maturity (most lenders offer a 120-day rate hold)
- Get the renewal letter in writing — that's your benchmark
- Compare APR and total interest cost over the term, not just rate
- Ask about prepayment privileges and penalty calculation methods
Frequently asked questions
+Can I switch lenders at renewal without a penalty?
Yes. At maturity there is no early payout penalty. A straight switch of the existing balance is often free; the new lender frequently covers legal and appraisal costs.
+How early should I start shopping my renewal?
120 days before your maturity date. Most lenders will hold a renewal rate for 120 days, so starting early protects you against rate increases.
+Will I have to re-qualify under the stress test?
For a straight renewal with your existing federally regulated lender, no. For a switch to a new federally regulated lender or a refinance, yes — you'll need to qualify at the stress-test rate.
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Displayed rates, if shown, are for informational purposes only and may change without notice. The rate available to an individual borrower depends on credit profile, income, down payment/equity, property type, loan-to-value, occupancy, lender guidelines, and other factors.