Renewal Calculator

A mortgage renewal calculator takes the balance you will actually owe at your maturity date, re-amortizes it over the years you have left, prices it at a renewal rate you choose, and reports the difference against the payment you are making today. That difference — payment shock — is the number the renewal decision turns on, and it is the number your renewal letter never shows you.

Most Canadian lenders will hold a rate for you 120 days before maturity, and several will go to 180 days. The hold is free and one-directional in your favour: if rates fall between the hold and your maturity date, you take the lower rate; if they rise, you keep the held one. Federally regulated lenders must also send you a renewal statement at least 21 days before the term ends, but 21 days is far too late to start shopping — by then you are negotiating against a deadline instead of against a competing commitment.

Not on a straight switch. Since November 21, 2024, OSFI has not required uninsured borrowers to re-qualify at the Minimum Qualifying Rate when they move an existing mortgage to a new lender without increasing the loan amount, extending the amortization, or changing the payment schedule. Insured mortgages have been exempt on straight switches for far longer. The exemption evaporates the moment the transaction stops being a straight switch: take equity out, consolidate debt into the mortgage, or stretch the amortization, and it is a refinance, which is fully stress-tested.

Two forces move in opposite directions and the rate usually wins. Your balance falls over the term, which pushes the payment down. But the remaining amortization also falls — a 25-year amortization taken five years ago has 20 years left, so the same balance is now compressed into fewer payments. Add a contract rate that is two points higher than the one that expired and the rate effect swamps both. The renewal calculator isolates the three effects so you can see how much of the increase is rate, how much is the shorter amortization, and how much a lump sum would offset.

On a straight switch at maturity there is no prepayment penalty, because the term has ended. What remains are transactional: a discharge or assignment fee from the outgoing lender (roughly $200 to $400 depending on province and charge type), a new-lender appraisal (about $300, frequently waived or covered), and legal or title work (often absorbed by the incoming lender through a switch program). Budget a few hundred dollars, and ask the new lender in writing which of those items it is covering before you sign.