Mortgage Renewal vs Refinance vs Switch in Ontario | 2026 Guide
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Emily Carter
Mortgage Education Specialist
September 2, 2026
- • A mortgage renewal happens when your current mortgage term ends, and you continue your mortgage under a new term and interest rate. Your mortgage balance and remaining amortization generally continue from where they left off.
- • A mortgage switch is when you move your mortgage from your current lender to another lender at the end of your term without materially changing the mortgage. A qualifying straight switch generally keeps the same mortgage amount and remaining amortization.
- • Mortgage refinancing replaces or restructures your existing mortgage so you can make larger changes, such as increasing the mortgage amount, accessing home equity, consolidating debt, or changing the amortization.
- • A qualifying straight switch at renewal can be exempt from the prescribed mortgage stress test. Refinancing generally requires you to qualify for the new mortgage under the applicable lending rules.
- • 2026 remains a significant mortgage renewal period in Canada. OSFI reported that 36% of mortgages that had not yet experienced a payment increase were expected to renew by the end of 2026.
- • OSFI removed its prescribed minimum qualifying rate requirement for qualifying uninsured straight switches between federally regulated lenders in November 2024. The exemption applies when the mortgage amount and remaining contractual amortization do not increase.
- • Renewal is usually the simplest option. A switch can make sense when another lender offers a better rate without requiring changes to the mortgage. Refinancing provides more flexibility when you need to change the mortgage amount or structure.
Why Ontario Homeowners Need to Understand All Three Options
When your mortgage term is coming to an end, you do not necessarily have to accept the renewal offer from your current lender.
You generally have three options: renew with your existing lender, switch the mortgage to another lender, or refinance the mortgage to make larger changes.
The important difference is what you want to change.
A renewal keeps your mortgage with your current lender under a new term and rate. A switch moves the mortgage to another lender without materially changing the mortgage. A refinance changes the mortgage itself, often to access equity, consolidate debt, increase the mortgage amount, or restructure the loan.
2026 remains an important renewal period for Canadian homeowners. OSFI reported that 36% of mortgages that had not yet experienced a payment increase since origination were expected to renew by the end of 2026. Many of these mortgages originated during the period of historically low mortgage rates, meaning some borrowers may face higher payments when their mortgages renew.
For Ontario homeowners, understanding the difference between renewal, switching and refinancing can help determine whether the simplest option is also the most suitable one.
What Is a Mortgage Renewal in Ontario?
A mortgage renewal happens when your current mortgage term expires and you continue your mortgage with a new term and interest rate. Your mortgage balance is not paid off in full, so the remaining balance continues into the new term.
When your renewal approaches, your lender will provide information about renewing your mortgage. You can accept the offer, negotiate with your current lender, or compare offers from other lenders.
A renewal with the same lender is generally the simplest option because you are not changing the lender or materially restructuring the mortgage.
What Happens at Renewal
When you renew with your existing lender:
- Your mortgage continues with the same lender
- You agree to a new term and interest rate
- Your remaining balance continues into the new term
- Your remaining amortization generally continues from where it left off
- You may be able to change your payment frequency or payment amount
- You may be able to change between fixed and variable products, depending on the lender and available products
- You generally do not have to go through a full new mortgage application simply to renew with the same lender
The exact process depends on your lender and mortgage product.
Renewal is also an opportunity to review whether your current mortgage still fits your financial situation. Even if you ultimately stay with the same lender, comparing available rates and mortgage features can help you make a more informed decision.
What Renewal Cannot Do
A straightforward renewal generally does not allow you to:
- Increase the mortgage amount to access home equity
- Add other debts to the mortgage
- Make a major change to the mortgage structure
- Increase the remaining amortization simply as part of a standard renewal
If you need to make a significant change to the mortgage, your lender may treat the transaction as a refinance or another form of mortgage restructuring.
Renewal Costs
Renewing with your existing lender is generally the least expensive option because there is usually no need for a new property registration, appraisal, or legal transaction simply to renew the existing mortgage.
However, costs can vary depending on what changes you make and the lender's requirements.
What Is a Mortgage Switch in Ontario?
A mortgage switch is when you move your mortgage from your current lender to another lender, usually when your existing mortgage term ends.
A straight switch generally means the mortgage amount and remaining amortization do not increase. The new lender takes on the mortgage, and you continue making mortgage payments under the new lender's terms.
The main reason to switch is usually to obtain a better rate, better terms, or mortgage features that are more suitable for your needs.
When a Switch Makes Sense
Switching lenders at renewal can make sense when:
- Another lender offers you a better mortgage rate
- You do not need to increase your mortgage amount
- You do not need to extend the remaining amortization
- You are comfortable with the new lender's mortgage terms
- The potential interest savings outweigh any switching costs
A lower rate can reduce your interest costs, but rate should not be the only factor you compare. Prepayment privileges, portability, payment flexibility and other mortgage features can also affect the overall value of the mortgage.
The 2024 OSFI Change That Made Some Switching Easier
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In November 2024, OSFI removed its prescribed minimum qualifying rate requirement for qualifying uninsured straight switches between federally regulated lenders.
The exemption applies when an existing stand-alone uninsured mortgage is moved from one federally regulated lender to another and there is no increase in the mortgage amount or remaining contractual amortization.
This means eligible uninsured borrowers making a qualifying straight switch at renewal do not have to be assessed using OSFI's prescribed minimum qualifying rate.
The federal government also introduced measures that allow eligible insured borrowers to switch lenders at renewal without another stress test.
The important point is that a straight switch is different from a refinance. If you increase the mortgage amount, extend the amortization, or make other material changes, the transaction may no longer qualify as a straight switch and new qualification requirements may apply.
Switch Costs
Switching costs vary depending on the lender, mortgage and transaction.
Potential costs can include:
| Cost Item | What to Expect |
|---|---|
| Legal or registration costs | May apply depending on the transaction |
| Discharge or transfer costs | May apply from the existing lender |
| Appraisal | May be required by the new lender |
| Prepayment penalty | Generally none when switching at maturity |
| Lender incentives | Some lenders may cover certain switching costs |
Some lenders offer to cover legal or appraisal costs as an incentive to attract borrowers. Always confirm which costs are covered before accepting a switching offer.
What Is a Mortgage Refinance in Ontario?
Mortgage refinancing involves replacing or restructuring your existing mortgage to make a larger change to the mortgage.
Unlike a straightforward switch, refinancing can allow you to increase the mortgage amount, access home equity, consolidate other debts, or make other changes to the mortgage structure, subject to lender qualification and applicable rules.
Refinancing can be done at the end of your mortgage term or during the term. Refinancing before maturity can result in a prepayment penalty.
What Refinancing Can Do That Renewal and a Straight Switch Cannot
| Capability | Renewal | Straight Switch | Refinance |
|---|---|---|---|
| Continue with same lender | Yes | No | Yes or no |
| Get a different rate | Yes | Yes | Yes |
| Increase mortgage amount | Generally no | No | Yes, subject to qualification |
| Access home equity | Generally no | No | Yes |
| Consolidate debts | Generally no | No | Yes |
| Extend amortization | Generally no | No for a qualifying straight switch | May be possible, subject to qualification |
| May be possible, subject to qualification | Change mortgage structure | Limited | Yes |
| Borrow up to 80% of home value | No | No | Generally possible for a standard refinance, subject to qualification |
| New mortgage qualification | Generally not for a simple renewal | Depends on the transaction and eligibility | Generally yes |
Refinancing can be done at the end of your mortgage term or during the term. Refinancing before maturity can result in a prepayment penalty.
What Refinancing Can Do That Renewal and a Straight Switch Cannot
The exact options available depend on your lender, income, credit profile, property value, mortgage balance and other factors.
Refinancing Mid-Term vs at Renewal
Refinancing at renewal is often less expensive than refinancing during the mortgage term because the existing term has reached maturity and a standard renewal does not involve breaking the mortgage early.
Breaking a closed mortgage before maturity can trigger a prepayment penalty. Depending on the mortgage contract, the penalty may be based on three months' interest, an interest rate differential, or another lender-specific calculation.
For many variable-rate mortgages, the penalty is typically three months' interest, but the exact calculation depends on the mortgage contract and lender.
For fixed-rate mortgages, the interest rate differential can result in a significantly larger penalty depending on the mortgage rate, remaining balance, remaining term and the lender's calculation method.
If you are considering refinancing before maturity, compare the potential benefit of the refinance against the total cost of breaking the existing mortgage.
Refinancing Costs
Refinancing can involve more costs than a straightforward renewal or switch.
Potential costs include:
| Cost Item | Potential Cost |
|---|---|
| Prepayment penalty | Depends on mortgage contract and lender |
| Legal fees | Depends on the transaction |
| Appraisal | May be required |
| Title insurance | May apply |
| Discharge or registration costs | May apply |
| Lender or broker fees | May apply depending on the mortgage |
There is no single standard refinancing cost for every Ontario homeowner. The total depends on whether the refinance occurs at maturity or mid-term, how much you are borrowing, the lender involved, and the mortgage structure.
Stress Test and Refinancing
The mortgage stress test is an important distinction between a qualifying straight switch and a refinance.
For uninsured mortgages, OSFI's minimum qualifying rate is generally the greater of the mortgage contract rate plus 2 percentage points or 5.25%. However, OSFI does not expect federally regulated lenders to apply this minimum qualifying rate to an uninsured straight switch at renewal when the mortgage amount and remaining amortization do not increase.
A refinance is different because the borrower is changing the mortgage. Increasing the loan amount, changing the amortization, or otherwise restructuring the mortgage generally means the borrower must qualify for the new mortgage under the applicable lending rules.
For this reason, homeowners should not assume that the rules for a straight switch also apply to a refinance.
Renewal vs Switch vs Refinance: Side-by-Side Comparison
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| Factor | Renewal | Switch | Refinance |
|---|---|---|---|
| Refinance | Timing | Usually at maturity | At maturity or mid-term |
| Current lender | Yes | No | Either |
| Mortgage amount | Generally unchanged | Unchanged for a straight switch | Can increase |
| Access home equity | Generally no | No | Yes |
| Debt consolidation | Generally no | No | Yes |
| Stress test | Generally no new qualification for a simple renewal | Depends on eligibility and transaction | Generally requires new qualification |
| Generally requires new qualification | Prepayment penalty | None at maturity | May apply if done mid-term |
| Legal costs | Usually minimal | May apply | More likely to apply |
| Appraisal | Usually not required for a simple renewal | May be waived or required | Often required |
| Amortization change | Limited | Not for a qualifying straight switch | May be possible |
| Complexity | Low | Low to moderate | Moderate to high |
| Best for | Continuing with your current lender | Getting a better rate or terms without materially changing the mortgage | Accessing equity or restructuring the mortgage |
Which Option Is Right for Ontario Homeowners in 2026?
The right choice depends on what you need your mortgage to accomplish.
The lowest mortgage rate is not automatically the best option. Consider the rate, mortgage features, costs, penalties, flexibility and your financial goals together.
Choose Renewal When
Renewal may make sense when:
- You are satisfied with your current lender
- The renewal rate is competitive
- You do not need to increase your mortgage
- You do not need to access home equity
- You do not need to restructure your mortgage
- Staying with your current lender provides the flexibility or convenience you want
Even when renewing with the same lender, it is worth comparing available mortgage rates before signing the renewal agreement.
Choose a Switch When
A switch may make sense when:
- Another lender offers a meaningfully better rate
- You want different mortgage features
- You are not increasing the mortgage amount
- You are not extending the remaining amortization
- The savings justify any transfer, legal or other costs
A qualifying straight switch at renewal can be particularly attractive because eligible borrowers may not have to meet the prescribed stress test requirements that apply to new mortgage underwriting.
Choose a Refinance When
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Refinancing may make sense when you need to change the mortgage itself.
Common reasons include:
Debt consolidation. An eligible homeowner may refinance to use available home equity to pay off higher-interest debts. This can reduce the interest rate on the consolidated debt, although it can also extend the repayment period and increase the total interest paid over time.
Accessing equity for renovations. Homeowners who have sufficient equity may be able to increase their mortgage to fund major renovations or other expenses, subject to lender qualification and applicable loan-to-value limits.
Changing the amortization. A refinance may allow a homeowner to change the amortization, subject to lender approval and applicable rules. Extending the amortization can reduce monthly payments but generally increases the total interest paid over the life of the mortgage.
Combining mortgage and other secured debt. A homeowner with a mortgage and other secured borrowing may consider restructuring the debt through a refinance if the new mortgage provides a suitable overall cost and structure.
Common Mistakes Ontario Homeowners Make With These Three Options
Accepting the first renewal offer without comparing alternatives. Your renewal offer is not necessarily the best rate available to you. Comparing rates from your existing lender and other lenders can help you understand your options.
Assuming every lender switch requires a stress test. Eligible straight switches can be exempt from the prescribed stress test requirements, depending on whether the mortgage meets the applicable conditions.
Assuming a switch and refinance are the same thing. A straight switch generally keeps the mortgage amount and remaining amortization unchanged. A refinance changes the mortgage itself and may involve new qualification.
Refinancing mid-term without calculating the penalty. A refinance can provide valuable access to equity or debt consolidation, but the benefit should be compared with any prepayment penalty and other transaction costs.
Waiting until the last minute. Starting your mortgage review several months before maturity gives you more time to compare lenders, negotiate with your current lender, gather documents and complete any appraisal or underwriting requirements.
Choosing based on rate alone. A slightly lower rate does not necessarily mean a better mortgage. Prepayment privileges, portability, penalties, payment flexibility and other terms can affect the total value of the mortgage.
How a Mortgage Renewal Calculator Helps With This Decision
A mortgage renewal calculator can help compare different mortgage scenarios before you speak with a lender or mortgage broker.
Depending on the calculator, you can compare:
- Monthly payments under different interest rates
- Total interest over the mortgage term
- Payment changes after renewal
- The effect of changing the amortization
- Potential savings from a lower rate
- The impact of consolidating other debt
- The potential break-even point when refinancing involves upfront costs or a prepayment penalty
For example, if you are deciding between renewing with your current lender at one rate and switching to another lender at a lower rate, the calculator can help estimate whether the interest savings justify any switching costs.
The same approach can be used when considering a refinance. Compare the potential interest savings or debt-consolidation benefit against the costs of refinancing before making a decision.
Frequently Asked Questions
What is the difference between a mortgage renewal and a refinance in Ontario?
A mortgage renewal happens when your current mortgage term ends and you continue your mortgage under a new term and interest rate. A refinance changes or replaces the mortgage itself, often to increase the mortgage amount, access home equity, consolidate debt, or restructure the mortgage. A renewal is generally simpler, while a refinance usually involves new mortgage qualification and additional costs.
Can I switch lenders at renewal without a stress test in Ontario in 2026?
In many cases, yes. Eligible insured borrowers can switch lenders at renewal without another stress test under the applicable federal rules. OSFI also does not expect federally regulated lenders to apply its prescribed minimum qualifying rate to qualifying uninsured straight switches at renewal when the mortgage amount and remaining amortization do not increase.
If you increase the mortgage amount, extend the amortization or make other material changes, the transaction may no longer qualify as a straight switch and new qualification requirements may apply.
Does switching mortgage lenders at renewal cost anything in Ontario?
It can. Depending on the lender and transaction, you may encounter legal, registration, discharge, appraisal or other costs. Some lenders offer to cover certain costs as an incentive to switch. There is generally no prepayment penalty when a mortgage reaches maturity and is then switched to another lender.
Is it better to refinance at renewal or mid-term in Ontario?
Refinancing at renewal is often less expensive because you generally do not have to break an existing mortgage term. Refinancing mid-term can trigger a prepayment penalty, which may be significant for some fixed-rate mortgages. If you need to refinance before maturity, compare the expected benefit with the penalty and other refinancing costs.
How early should an Ontario homeowner start looking at renewal, switch, and refinance options?
Starting several months before your maturity date gives you time to compare mortgage rates, negotiate with your current lender, gather documents and complete any appraisal or underwriting requirements. Do not assume that the date you receive your renewal statement is the first opportunity to compare options.
Can I switch lenders at mortgage renewal?
Yes. You can generally move your mortgage to another lender when your current mortgage term ends. If you are making a qualifying straight switch, the mortgage amount and remaining amortization generally remain unchanged. If you want to borrow more or make other material changes, you may need to refinance instead.
Can I refinance my mortgage at renewal without a penalty?
Generally, refinancing at the end of your mortgage term avoids the prepayment penalty associated with breaking the existing term early. However, refinancing can still involve legal, appraisal and other costs, and you generally need to qualify for the new mortgage.
What is the difference between switching and refinancing a mortgage?
A mortgage switch moves your existing mortgage to another lender without materially changing it. A refinance changes the mortgage itself, such as by increasing the mortgage amount, accessing home equity, consolidating debt or changing the amortization. A straight switch is generally simpler than a refinance.
Disclaimer: This article is for general educational purposes only and does not constitute financial, legal, or mortgage advice. Mortgage rules, lender policies, rates and costs can change. Information in this article is based on publicly available information available as of September 2026. Speak with a licensed mortgage professional before making a mortgage decision.
Speak with a Rateswise mortgage expert to compare your renewal, switch, and refinance options today.
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