Renewals & Switching
The renewal letter is an offer. You do not have to take it.
Signing your lender's renewal without comparing is the most common avoidable cost in a mortgage. A few hours of comparison can change what you pay for the next five years.
Your term is ending. Your options are wider than the letter.
Renewal coming up
Your term ends soon and your lender sent a letter. Before you sign it, find out what else is available.
Want to switch lenders
You are happy with your home but not your rate or your lender's service. A switch at maturity can be straightforward.
Want to borrow more?
Adding money to the mortgage at renewal, for a renovation or to pay out other balances, makes it a refinance, with its own qualifying and costs.
How refinancing works →Renewal vs switch vs refinance
They sound similar but have different qualifying criteria, costs, and outcomes.
Renewal
You stay with your current lender on new terms. No re-qualification in most cases. Simplest path, but that simplicity is what lenders count on when they send an uncompetitive offer.
Switch (transfer)
You move the same balance to a different lender at maturity, often with the new lender covering legal and discharge costs. The new lender reviews your file, but since November 21, 2024 a straight switch of an uninsured mortgage, with no new money and the same amortization, skips the stress test.
Refinance
You change the loan amount, to pull equity out, pay out other balances, or fund a renovation. This is a new mortgage application with full qualification, the stress test, an appraisal and legal costs.
Refinancing explained →What to know before you decide
When to start
Most lenders allow you to begin the renewal conversation roughly four months before maturity. Starting early gives you time to compare and, if rates are favourable, lock a rate hold that protects you while you decide.
Costs to expect
A straight switch at maturity often has minimal cost: the new lender covers legal fees in many cases. A refinance involves legal costs, a possible appraisal, and sometimes a discharge fee. Breaking mid-term triggers a prepayment penalty, and the calculation differs between fixed and variable rates.
Prepayment penalties
If you break a variable-rate mortgage, the penalty is usually three months of interest. Fixed-rate penalties use the greater of three months' interest or an interest rate differential (IRD) calculation. IRD methods vary by lender and can produce surprisingly large numbers. Always request the exact penalty figure before making a decision.
Rate holds
A rate hold locks today's rate for a set period while you finalise your decision. If rates drop before closing, you get the lower rate. If they rise, you keep the held rate. This removes the pressure to rush.
Rates and figures shown are illustrative, subject to change without notice, and are not an approval or a commitment to lend.
Straight answers
Most lenders allow you to begin the renewal process roughly four months before your term ends. Starting early gives you time to compare, lock a rate hold, and switch lenders if that makes sense, without rushing.
On a straight switch (same balance, no new funds), the receiving lender often covers the legal and discharge costs. There may still be a discharge fee from your current lender. If you are breaking mid-term rather than switching at maturity, a prepayment penalty applies.
Yes, but borrowing more turns the renewal into a refinance: a new application, the stress test, an appraisal and legal costs. Renewal is still often the cheapest time to do it, because there is no prepayment penalty. The refinancing page covers how it works.
The new lender still reviews your application, income and property. Since November 21, 2024, a straight switch of an uninsured mortgage at renewal (no new money, same amortization) no longer has to pass the stress test. Add money or extend the amortization and the stress test applies again.
It depends on whether you have a fixed or variable rate. Variable-rate penalties are usually three months of interest. Fixed-rate penalties are the greater of three months' interest or an interest rate differential (IRD) calculation, and IRD methods vary by lender. Ask for the exact number before deciding.
Compare before you sign
Send your renewal letter and get a side-by-side comparison. No obligation, no credit pull at this stage.