Why the Gap Between Bank and Agent Renewal Rates Exists
Banks quote posted rates at renewal — not their best rates. The gap between a bank’s posted renewal rate and the rate an agent can negotiate for the same borrower at the same lender (or a competing lender) is typically 40–80 basis points in 2026. On a $600,000 renewal balance, 50 basis points over 5 years is $14,400 in unnecessary interest.
The retention math is simple: banks know 70% of customers sign without shopping. The renewal letter is designed to feel final and urgent. It’s neither.
What Switching Lenders at Renewal Actually Costs
Switching lenders at your maturity date is penalty-free. The only cost: a discharge fee from your current lender ($250–$350), frequently covered by the new lender as a competitive incentive. The process requires less than two hours of your time total.
Start 120 days before your maturity date — that’s when the rate hold window opens. Read our full Mortgage Renewal Guide for the complete step-by-step playbook.
Ontario Mortgage Renewal — Common Questions
Renewal Calculator FAQ — Switching, Rates & Savings
Penalties, timing, rate gaps, amortization changes — everything Ontario homeowners ask before deciding whether to stay or switch at renewal.
No — switching at your maturity date is completely penalty-free. The only potential cost is a $250–$350 discharge fee from your current lender. Most competing lenders cover this as an incentive. Penalties only apply if you break your mortgage before your maturity date.
The week your bank’s renewal letter arrives — typically 120 days before your maturity date. This gives you the full shopping window and allows your agent to lock in a rate hold at today’s rate, protecting you if rates move before your maturity date.
Broker-channel 5-year fixed renewal rates: 4.69%–4.89% for borrowers with 680+ credit and 20%+ equity. Bank posted renewal offers typically: 5.24%–5.49%. The gap is real and consistent across major Canadian banks.
Yes — renewal is a natural reset point. You can extend your amortization (lower monthly payment) or shorten it (less total interest). Extending to 30 years is available with 20%+ equity. There’s no penalty for adjusting amortization at renewal.
Still Have Questions?
Not seeing your exact situation here? Let’s take a look at your numbers and walk through your options step by step.
