What a renewal letter is, and what it isn't
A few months before your term ends, your lender sends a renewal statement. If your lender is federally regulated, it has to arrive at least 21 days before the end of your term and set out your remaining balance, the rate being offered, the payment frequency, the length of the new term and any charges that apply. The rate quoted is guaranteed not to increase before your renewal date. Those are requirements, not courtesies — you can read them on the Financial Consumer Agency of Canada's renewal page.
So the letter is an offer, not an invoice, and not the only number available to you. Signing it and sending it back is the quickest of your options, and that convenience is exactly why it earns a second look. At maturity your mortgage is completely mobile: every lender in the country is available to you, and the terms are yours to negotiate.
Renewing where you are, versus moving the mortgage
At maturity you have three genuinely different options. They are assessed differently, they cost different things to arrange, and they open up different amounts of the market.
| Option | What actually happens | What underwriting looks like | Costs to plan for |
|---|---|---|---|
| Renew with your current lender | You sign a new term on the same balance and the same remaining amortization. Nothing is re-registered on title. | No new application. Your lender simply offers you a new term. | Generally none, beyond any fee named in your renewal statement. |
| Switch (transfer) to a new lender | Same balance, same remaining amortization, new lender takes over the security on your home. | A new application at the new lender. A straight switch is exempt from the prescribed minimum qualifying rate. | Discharge and registration, sometimes an appraisal. Many lenders cover part or all of this. |
| Refinance | A new mortgage, for a larger amount or on a new amortization schedule. | A full application, assessed against the minimum qualifying rate. | Appraisal, legal and registration costs. |
What counts as a "straight switch"
The regulators use a precise definition, and it matters more than any other detail on this page. A straight switch is the same borrower moving an existing mortgage to a new federally regulated lender at renewal with no increase to the loan amount and no increase to the remaining amortization. The balance may rise by up to $3,000 to cover transaction costs, but no equity may be taken out. Ask for more money or a longer runway and it becomes a refinance, assessed as one — so it is the first thing I establish with you.
Does switching lenders at renewal trigger a penalty?
At maturity, no. A prepayment charge exists to compensate a lender for a term that ends early, and at your maturity date the term has run in full — there is nothing ending early and nothing to compensate. FCAC puts it plainly: at renewal you can transfer your mortgage to another lender without penalty. Prepayment charges belong to the mid-term conversation, which is a refinance question.
What can appear instead are transfer costs: discharging the existing charge, registering the new one, and occasionally an appraisal. Plenty of lenders absorb some or all of these to earn the business, so I ask at the quoting stage. Comparing offers properly means comparing the whole package, not one number on the front page.
One structural detail is worth knowing early: your mortgage was registered either as a standard charge or a collateral charge, and that changes how a switch is handled. FCAC notes collateral charges may be harder to transfer to another lender, since that security often covers a line of credit alongside the mortgage. It is entirely workable — the incoming lender registers fresh security rather than taking over the old charge — so we build it into the timeline from the start.
The stress test at renewal: what changed
This is the piece most homeowners have out of date, and it is the main reason renewals are more open now than they were three years ago.
Staying put. A straight renewal does not require a new application. You are not requalified, your income is not re-verified, and the qualifying rate does not come into it. Your lender is simply offering a new term on a mortgage they already hold.
Moving to a new lender. This is where the rules changed. On 21 November 2024 OSFI announced it would no longer prescribe the minimum qualifying rate that it expects federally regulated financial institutions to apply when uninsured borrowers switch to a new institution at renewal (OSFI). The federal government aligned the insured side effective 16 December 2024 for low-ratio mortgages switching lenders at renewal (Department of Finance).
Two things sit alongside that. The minimum qualifying rate is still in force for new uninsured mortgages generally — OSFI's published position is the greater of the contract rate plus a two percentage point buffer, or a published floor rate. And the exemption lifts the prescribed floor rather than the underwriting: lenders still review a switch application against their own standards. In practice a straight switch is far lighter work than it used to be, and many more homeowners can now shop their renewal freely.
If your mortgage carries default insurance, that insurance stays attached to the loan — moving it at renewal on the same balance and amortization does not mean buying a new premium. A premium question only arises when the amount or the amortization goes up.
Rate holds and starting early
Lenders will hold a rate for you ahead of your maturity date, commonly from around four months out, with some going further. Hold windows are lender policy rather than regulation, so they vary — which is why starting early is useful. The earlier we look, the more windows are open at once.
A hold works one way in your favour: it caps what you will pay while leaving you free to take a better number if one appears before closing. There is no cost to holding one, and no obligation attached.
Blend-and-extend
If you would like to start a new, longer term before your current one is finished, some lenders offer a blend-and-extend. FCAC describes it as the lender blending your old interest rate and the new term's rate for the extended term, without a prepayment charge, though administration fees can apply (FCAC). It is a clean option when you are happy where you are and want certainty sooner, worth pricing against a straight renewal at maturity.
Amortization at renewal
Your amortization is the full runway; your term is the stretch of it you have priced. Renewal is the easiest moment to adjust that runway on purpose.
- Shortening it raises the payment and retires the balance sooner. If your income has grown since you last signed, this is the cheapest good decision available at renewal.
- Keeping it as scheduled is what a straight renewal or straight switch does automatically, and it keeps every door open.
- Extending it lowers the payment and is a legitimate cash-flow tool. It takes you outside the straight-switch definition if you are also changing lenders, and FCAC notes that stretching amortization increases total interest over the life of the loan. Made deliberately, it can be exactly the right call.
The renewal wave, and why BC files are busy right now
In May 2026, CMHC reported that Canada's residential mortgage industry continued to be dominated by renewal activity in 2025, marking a peak in the mortgage renewal wave, with volumes expected to ease through 2026 as the large cohort of three- and five-year terms written in the early 2020s finishes running its course (CMHC).
Two things follow for a homeowner in Kelowna or anywhere in BC. Lenders know how much renewal business is in the market, so competition for it is genuine and active, and that competition is available to you. And because so many files move through at once, giving your renewal a few months of runway rather than a few weeks is what turns a good offer into the best one on the table.
A renewal timeline that works
- Six months out. Send me your mortgage statement and maturity date. I confirm the balance, remaining amortization, standard or collateral charge, and whether the mortgage is insured — which tells us immediately whether a straight switch is on the table.
- Four months out. We shop the market across my lender panel and secure a rate hold, so you have a ceiling on your rate and everything from here is upside.
- Three months out. Your renewal statement arrives. We compare it against the held offer: rate, term, prepayment privileges, portability, penalty structure and any costs on each side.
- One month out. You choose. Staying, we take your best outside offer back to your lender and ask them to meet it; moving, the transfer paperwork goes in with room to spare.
- Maturity week. The new term starts on schedule and payments carry on without a gap. A transfer arranged with lead time is a quiet administrative event, which is exactly how it should feel.
How I handle a BC renewal
I am a licensed submortgage broker in Kelowna with access to more than 50 lenders — banks, credit unions, monoline and specialty lenders a single branch cannot show you. Mortgage brokering in British Columbia is regulated by the BC Financial Services Authority, and on conventional mortgages there is no cost to you for my work.