The mortgage renewal timeline, and why 120 days matters
Renewal is the one moment in a mortgage where you have real leverage and no penalty. It lasts a few weeks and most people sleep through it. Here is the schedule that puts you in front of it.
Updated July 25, 2026Why the window matters
At renewal you can leave without a prepayment penalty. That is the only time in your term when that is true, and it is the entire source of your bargaining power.
During a term, moving lenders means breaking the contract, and FCAC sets out how expensive that gets: the penalty is usually the higher of three months interest on what you still owe, or the interest rate differential. FCAC's own worked example, on a $200,000 balance at 6 per cent with 36 months left and a 4 per cent posted rate for a comparable term, gives three months interest of about $3,000 against an interest rate differential of about $12,000. You pay the higher one.
At the end of the term, that number is zero. Which means the renewal offer from your existing lender is not a decision you have to accept, it is an opening bid you are free to walk away from. Lenders know this, which is why retention teams exist, and why the rate on the letter is often not the best rate that lender will actually give you.
The 120 day plan
120 days out: get a rate hold somewhere else
Most lenders and brokers will hold a quoted rate for 90 to 120 days. A hold costs nothing and commits you to nothing. What it does is establish a floor, so if rates rise you are protected and if they fall you take the better one. This single step is where most of the saving in this whole process comes from.
110 days out: read your own mortgage
Find out three things: whether your charge is a standard charge or a collateral charge, what your current prepayment privileges are, and whether any optional creditor insurance is attached and what it costs each month. Your lender must tell you the charge type if you ask.
90 days out: get two or three real quotes
FCAC's advice is to contact various lenders and mortgage brokers rather than waiting on your own lender's letter. Ask each one for the rate, the term, the prepayment privileges, and whether they will cover switching costs. Get it in writing or by email, because you may need to show it.
60 days out: call your own lender's retention team
Not the branch, the retention or mortgage renewal team. Tell them you have competing offers and be ready to prove it. FCAC notes you may qualify for a discounted rate lower than the one quoted in the renewal letter, and that you may need to provide proof of the offers you have received.
21 days out at the latest: the renewal statement arrives
By law, if it has not arrived by this point from a federally regulated lender, something is wrong. Check it against what you were told verbally.
Before the maturity date: sign, or move
If you are switching, the new lender needs lead time to complete. Starting a switch two weeks before maturity is how people end up accepting a worse rate for lack of time.
Get one competing written quote before you speak to your current lender. Everything else on this page is an elaboration of that one action, and it is the difference between negotiating and being quoted at.
What the renewal statement must tell you
If your mortgage is with a federally regulated financial institution such as a bank, the lender must provide you with a renewal statement at least 21 days before the end of the existing term, and must also notify you 21 days before the end of your term if it will not renew. The statement must set out the balance at renewal, the interest rate, the payment frequency, the term and any charges or fees, and must specify that the rate offered will not increase before your renewal date.
Source: Financial Consumer Agency of Canada, read July 25, 2026.
Two details in that list are worth pausing on. First, the statement must disclose any charges or fees that apply, so read that line rather than skipping to the rate. Second, if your lender intends to renew you automatically, it must say so in the statement. If it does, and you do nothing, you have chosen the posted offer by default.
Early renewal offers
Lenders sometimes offer to renew you months early, often bundled with a small incentive. Sometimes that is a genuinely good deal, and sometimes it is a way to close you before you shop.
Is the offered rate competitive against current market quotes, not against your old rate? Does renewing early trigger a prepayment penalty, because renewing before maturity can be treated as breaking the existing term? And is the term they are offering the term you actually want, or the one that suits them?
An early renewal that locks you into a longer term at a rate you did not benchmark is the most expensive form of convenience available in Canadian retail banking.
The market you are renewing into
We are not going to tell you where rates are heading, because nobody credible knows and any page that pretends otherwise is selling something. What we can do is point you at the two numbers worth watching yourself.
The Bank of Canada's target for the overnight rate was 2.25 per cent following the July 15, 2026 decision, with the next scheduled announcements on September 2, October 28 and December 9, 2026. The overnight rate drives prime, which drives variable mortgage rates. Fixed mortgage rates follow bond yields instead, which is why the two do not move together.
CMHC reported total residential mortgage debt of $2.4 trillion as of December 2025, up 4.8 per cent year over year, and a national 90 plus day mortgage delinquency rate of 0.24 per cent in the fourth quarter of 2025.
Sources: Bank of Canada, read July 25, 2026, and CMHC, released May 12, 2026.
CMHC's own framing of the current renewal cycle is that renewal volumes are expected to ease through 2026 but that most borrowers renewing still face significant increases in interest costs. If your payment is going up, that is the environment, not a personal failure, and it makes shopping the renewal more valuable rather than less.
Common questions
When should I start shopping for my mortgage renewal?
FCAC advises starting a few months before the end of your term and specifically not waiting for the renewal letter. Four months out is a practical target, because most lenders will hold a rate for 90 to 120 days, which means you can lock a rate as a floor while you keep negotiating.
How much notice does my lender have to give me before renewal?
If your lender is a federally regulated financial institution, it must give you a renewal statement at least 21 days before the end of your existing term, and must also tell you 21 days ahead if it does not intend to renew at all.
What happens if I do nothing at renewal?
FCAC states that if you do not take action the renewal of your term may be automatic, which means you may not get the best interest rate and conditions. If your lender plans to renew you automatically, it must say so in the renewal statement. Automatic renewal is convenient and it is almost never the cheapest outcome.
Is there a penalty for leaving my lender at renewal?
No prepayment penalty applies if you move at the end of your term rather than during it. That is the whole point of the renewal window. There can still be administrative costs to switch, such as discharge, registration, transfer or appraisal fees, and the new lender will often cover some or all of them if you ask.
Can I negotiate before I receive the renewal letter?
Yes, and you should. Nothing stops you calling your lender's mortgage retention team early or getting competing quotes months in advance. The renewal statement is a legal minimum notice, not the start of the conversation.
Sources
- Financial Consumer Agency of Canada, Renewing your mortgage. Source for the 21 day renewal statement rule, what a renewal statement must contain, automatic renewal, and the costs of switching lenders. Read July 25, 2026.
- Financial Consumer Agency of Canada, Mortgage fees: prepayment penalties. Source for how three months interest and the interest rate differential are calculated. Read July 25, 2026.
- Office of the Superintendent of Financial Institutions, Minimum qualifying rate for uninsured mortgages. Source for the minimum qualifying rate definition and the straight switch exemption. Page last updated January 29, 2026.
- Department of Finance Canada, Straight switches and portfolio insurance. Source for the insured straight switch criteria, effective December 16, 2024.
- Bank of Canada, Policy interest rate. Source for the target for the overnight rate and the schedule of announcement dates. Read July 25, 2026.
- Canada Mortgage and Housing Corporation, Renewal wave peaks but still dominates mortgage market. Source for the residential mortgage debt total and the 90 plus day delinquency rate. Released May 12, 2026.
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