Mortgage renewal rates in Ontario are the interest rates offered when your existing mortgage term ends, allowing you to secure a new term for your loan. The process involves reviewing your lender's offer and comparing it with rates from other financial institutions and mortgage brokers. As of 2026, advertised five-year fixed rates from major banks can be as low as 4.24%, while five-year variable rates may start around 3.65%. Understanding renewal options is crucial for Ontario homeowners to manage their largest debt effectively and potentially save thousands of dollars over the next term.
Understanding Mortgage Renewal in Ontario
Mortgage renewal is the process of selecting a new interest rate and term when your current mortgage contract expires. Your original mortgage amount and amortization period typically remain unchanged during a standard renewal. The renewal statement from your lender outlines the new interest rate, mortgage term, payment amount, and options available to you. This statement is designed to make renewal straightforward, but it usually reflects your lender's default offer, which may not be the most competitive rate on the market. Homeowners can begin shopping for renewal rates up to 120 days before their mortgage term ends without incurring a penalty, providing a critical window to compare offers.
It is important to distinguish between a mortgage renewal and a refinance. A renewal involves simply taking out a new rate and term by signing a new contract when your existing term expires. A refinance means making significant changes to your mortgage, such as altering the principal amount, the amortization period, or the type of mortgage. Borrowers can choose to refinance at renewal time without incurring a penalty, whereas breaking a mortgage mid-term to refinance triggers specific penalties. The year 2026 is noted as one of the busiest mortgage renewal years in recent history, as many homeowners who secured mortgages during the peak of the pandemic come up for renewal.
Current Mortgage Rate Landscape in Ontario
Mortgage renewal rates in Ontario vary by term, product type, and lender. As of July 2026, among Canada's Big Five banks, Scotiabank advertises the lowest five-year fixed mortgage rate in Ontario at 4.24%. For five-year variable rates, RBC and Scotiabank advertise rates as low as 3.65%. These are advertised rates and actual renewal offers will depend on an individual's financial profile and specific mortgage details. Shorter-term fixed options can sometimes remain below 4%, including two-year fixed rates. It is common to see a range of rates from different types of lenders, including major banks, credit unions, monoline lenders, and brokers.
Five-year fixed mortgages remain popular in Ontario because they offer a balance between payment predictability and a manageable term length. The rates for these products generally follow the five-year Government of Canada bond yield, priced at a spread above that yield. Shorter terms like two-year and three-year mortgages have also become more common, especially for borrowers who believe interest rates may decrease in the future. The relative cost of different mortgage terms changes with market conditions, so shorter terms do not always have lower rates than a five-year term. Borrowers who value predictable payments and want more time before needing to renew again often opt for a five-year fixed mortgage.
Key Players in the Ontario Mortgage Market
The Ontario mortgage market is large and diverse, with a residential mortgage and Home Equity Line of Credit (HELOC) market totalling approximately $1.15 trillion as of the second quarter of 2026. Canada's Big Six Banks, which are RBC, TD, Scotiabank, CIBC, BMO, and National Bank, operate in Ontario and hold over 85% of the outstanding mortgages as of April 2026. These institutions are the largest lenders in the province. However, other lenders account for a meaningful share of new mortgages originated.
In more expensive housing markets like the Greater Toronto Area (GTA), alternative and private lenders play a greater role. Private mortgage lenders accounted for 12.5% of Ontario residential mortgage dollar value in 2024. Some smaller, specialized lenders serve specific customer groups. For example, Wealth One Bank of Canada focuses on self-employed borrowers, newcomers, and those with foreign income sources. Home Trust Company is positioned as an alternative mortgage lender for those with bad credit or self-employment income. Demographics influence lender choice, with FSRA's 2024 consumer research showing that 31% of Ontario consumers who used mortgage brokering services had worked with a broker to obtain a mortgage from a non-traditional lender.
The Mortgage Renewal Process and Timeline
The renewal process should start well before your current mortgage term matures. You can typically begin shopping for renewal rates up to 120 days before your term ends without paying a penalty. Starting early provides flexibility to compare offers from different lenders, negotiate with your current bank, and make informed decisions. The first step is to review the renewal statement sent by your current lender, which details their offer. It is crucial to look beyond just the interest rate and compare overall mortgage terms, flexibility, and borrowing costs. Key factors to consider include whether the offer is for a fixed or variable rate, how it affects your payment amount and total interest paid, and if the term aligns with your financial goals.
You should also review prepayment privileges, penalty rules for breaking the mortgage early, portability options if you plan to move, and any fees or incentives for switching lenders. Some lenders offer cashback offers or cover legal fees to incentivize a switch. If you decide to shop around, you can contact other banks, credit unions, or work with a licensed mortgage broker. Mortgage brokers in Ontario can access rates from multiple lenders. As of 2025, Ontario had 3,059 licensed mortgage brokers and 15,158 licensed mortgage agents, according to the Financial Services Regulatory Authority of Ontario (FSRA). Once you have competing offers, you can use them as leverage to negotiate a better rate with your current lender.
- Start reviewing options 120 days before your term end date.
- Receive and examine your lender's renewal statement.
- Shop around with other lenders and mortgage brokers.
- Compare full terms, not just the interest rate.
- Negotiate with your current lender using competing offers.
- Formally accept an offer and sign new mortgage documents.
Renewal Options: Fixed vs. Variable Rates
At renewal, homeowners must choose between two primary types of mortgage rates: fixed or variable. A fixed mortgage rate is set for the entire term of the mortgage, resulting in consistent, unchanging payments. This provides predictability and protects against interest rate increases during the term. A variable mortgage rate is tied to the lender's prime lending rate, which can change based on the Bank of Canada's policy rate. Variable rates often start lower than fixed rates but carry the risk of payment fluctuations if interest rates rise. With a standard variable-rate mortgage, your payment amount may change when the prime rate changes. With a fixed-payment variable mortgage, your payment stays the same, but the proportion going to interest versus principal adjusts with rate changes.
The choice between fixed and variable depends on your risk tolerance, financial stability, and outlook on interest rates. Locking in a fixed rate for five years lets you avoid short-term fluctuations in market interest rates and provides peace of mind. A shorter fixed term, like two or three years, may appeal to borrowers who believe rates will fall and want to renew sooner at a potentially lower rate. However, a two-year term means you will go through the renewal process more frequently. Variable rates can be advantageous in a falling or stable rate environment but require budgeting for potential payment increases. Your mortgage broker or advisor can help you evaluate which rate type aligns with your financial goals.
Switching Lenders at Renewal
Switching your mortgage to a new lender at renewal is a common strategy to secure a better interest rate or improved terms. As of November 2024, borrowers who switch lenders at renewal may be exempt from the federal mortgage stress test, provided their mortgage amount and amortization do not change and the mortgage is held with a federally regulated financial institution. This exemption can make qualifying easier. The process for switching lenders typically involves the new lender handling most of the administrative work, including obtaining a payout statement from your old lender and registering a new mortgage on your property. Some new lenders offer incentives to switch, such as covering legal fees or providing cash back.
However, switching lenders can be more complicated if you have a collateral mortgage. In a collateral mortgage, the lender registers a charge on your property for an amount higher than your loan, providing future borrowing room. Moving to a new lender with a collateral mortgage usually requires paying legal fees to discharge the old collateral charge, as it cannot be transferred to another institution. Because of these added costs, many borrowers with collateral mortgages choose to stay with their existing lender at renewal, even if better rates are available elsewhere. Some lenders may cover these discharge fees as an incentive to switch. It is essential to understand your mortgage type and associated costs before deciding to switch.
Costs, Qualifications, and Potential Pitfalls
Renewing a mortgage can involve various costs and fees, depending on your actions. If you renew with your current lender with no changes, there are often minimal or no fees. Switching to a new lender may involve legal and administrative fees, though these are frequently covered by the new lender as a promotion. If you increase your mortgage amount, change your amortization, or refinance at renewal, there will likely be costs such as appraisal fees, legal fees, and potentially a new mortgage default insurance premium if you are increasing your loan-to-value ratio. For a straight renewal or switch where the mortgage amount and amortization stay the same, you typically qualify at your contract rate rather than having to re-qualify under the stricter federal stress test rate.
Lenders are generally required to renew a mortgage if you have made your payments on time and your financial situation has not deteriorated significantly. However, a lender can choose not to renew if your income has dropped, your debt has increased substantially, or your credit score has worsened. If your renewal is denied, you still have options, including switching to another lender. A common mistake is accepting your current lender's first renewal offer without shopping around. Another pitfall involves pre-payment penalties. If you have made lump-sum payments exceeding your annual pre-payment privileges before renewal, you could face costly penalties. Always review the fine print of your current mortgage agreement and the new offer to avoid unexpected charges.
- Minimal fees for a simple renewal with your current lender.
- Potential legal/administrative fees when switching lenders.
- Stress test exemption may apply for straight switches.
- Lenders can deny renewal for significant financial deterioration.
- Pre-payment penalty risks if you exceeded privileges before renewal.
- Collateral mortgages add complexity and cost to switching.
Frequently asked questions
When should I start looking for mortgage renewal rates in Ontario?
You should start shopping for mortgage renewal rates up to 120 days before your current term ends. This early start gives you ample time to compare offers from different lenders, negotiate with your current bank, and make an informed decision without pressure. Renewing early does not lock you in immediately, and if interest rates improve before your maturity date, you may still be able to secure a lower rate. Waiting until the last minute limits your options and often results in accepting your lender's first, potentially less competitive, offer.
Can my bank refuse to renew my mortgage in Ontario?
In most cases, if you have made your payments on time and your financial situation has not changed significantly, your lender is unlikely to deny your mortgage renewal. However, a lender can choose not to renew if your income has dropped, your debt has increased substantially, or your credit profile has worsened. If your renewal is denied, you have options, including switching to another lender. You may be able to do a straight switch where your mortgage amount and amortization stay the same, and under certain conditions, you may not have to requalify for the mortgage stress test.
What is the difference between a mortgage renewal and a refinance?
A mortgage renewal involves signing a new contract for a new interest rate and term when your existing mortgage term expires, with your original mortgage amount and amortization typically remaining unchanged. A mortgage refinance means making significant changes to your mortgage, such as altering the principal amount, the amortization period, or the type of mortgage. Borrowers can refinance at renewal time without incurring a penalty, whereas breaking a mortgage mid-term to refinance triggers specific prepayment penalties. A renewal is generally a simpler process focused on securing a new rate, while a refinance changes the fundamental structure of the loan.
What are current mortgage renewal rates in Ontario?
Mortgage renewal rates vary by term, lender, and product type. As of 2026, advertised rates from major banks show a five-year fixed rate as low as 4.24% and a five-year variable rate as low as 3.65%. Shorter-term fixed options can sometimes be found below 4%. It is important to note that these are advertised rates, and your actual renewal offer will depend on your specific financial profile, credit score, property value, and the details of your mortgage. Shopping around and comparing offers from multiple lenders and mortgage brokers is the best way to find a competitive rate for your situation.
Is it difficult to switch lenders when renewing a mortgage in Ontario?
Switching lenders at renewal is a common practice and is generally straightforward, especially with a standard charge mortgage. The new lender often handles most of the paperwork. However, if you have a collateral mortgage, switching is more complicated and often more expensive, as it requires paying legal fees to discharge the old collateral charge, which cannot be transferred. Because of these added costs, some borrowers with collateral mortgages stay with their existing lender. Many lenders offer incentives like covering legal fees to attract switchers. Working with a mortgage broker can simplify the process of comparing offers and handling a switch.
Do I have to pass the stress test when renewing my mortgage?
If you are renewing with your current lender and not making any changes to your mortgage, you typically do not have to pass the federal mortgage stress test. As of November 2024, borrowers who switch lenders at renewal may also be exempt from the stress test, provided their mortgage amount and amortization do not change and the mortgage is with a federally regulated financial institution. However, you would need to pass the stress test if you are increasing your mortgage amount, extending your amortization period, or switching lenders under circumstances that alter your original loan terms. This exemption for switches at renewal simplifies the process for homeowners seeking better rates. It is important to confirm your specific circumstances with a mortgage professional to understand your requirements.
Sources and further reading
- Current Mortgage Rates | RBC Royal Bank of Canada rbcroyalbank.com
- Best mortgage renewal rates in Canada ratehub.ca
- Ontario Mortgage Rates (Compare 35+ Lenders) wowa.ca
- Mortgage Renewal Calculator (2026) | Rates from 2.49% truenorthmortgage.ca
- Mortgage rates across Canada 1 cibc.com
This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.