Switch your mortgage to another lender
A switch moves the same balance to a new lender at renewal. Since November 2024 most straight switches are no longer stress-tested — which is the change that makes leaving your bank realistic again.
- Straight switches: same balance, same amortization, no stress test
- No prepayment penalty when you switch at renewal
- Many lenders cover the legal and appraisal costs
- Two to four weeks start to finish
- I'll tell you if your current lender's offer is already the better deal
Thank you
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- A 10-minute call to confirm your goals and numbers.
- I check your file against 30+ lenders and send you the realistic options.
- If it makes sense, we apply. If it doesn't, I tell you that too.
What a switch is, and what it is not
A switch — lenders also call it a transfer — moves your existing mortgage to a different lender at renewal, keeping the same loan amount and the same remaining amortization. No new money is advanced. That specific shape is what the industry calls a straight switch, and the phrase matters because it is what the stress-test exemption attaches to.
It is worth being precise, because these three words get used interchangeably and they have very different costs:
- Renewal — same lender, new term, same balance. No new approval.
- Switch / transfer — new lender, same balance, same amortization, no new money. Usually not stress-tested. No penalty at renewal.
- Refinance — the mortgage is rewritten, usually larger. Always stress-tested. Mid-term, it triggers a penalty.
If someone offers to "refinance you into a better rate" when all you want is the same balance at a lower rate, ask why it is not a switch. Sometimes there is a good reason. Sometimes there is not, and the difference is a penalty plus a stress test you did not need to face. The switch vs refinance guide works through it.
The November 2024 change, precisely
OSFI's position, in its own words, is that it "does not expect lenders to apply the minimum qualifying rate for uninsured straight switches at renewal." That took effect 21 November 2024.
The timeline, since it unfolded in stages: insured borrowers have been exempt at renewal since January 2024. Uninsured straight switches became exempt on 21 November 2024. On 16 December 2024 the federal government confirmed the exemption also covers insurable mortgages that originated at a federally regulated financial institution.
The conditions are narrow and worth memorising, because stepping outside them puts the stress test back on the table:
- The loan amount must not change.
- The amortization must not be extended.
- No new money may be advanced.
- The mortgage must have originated at a federally regulated financial institution.
Meet all four and the new lender assesses you at the contract rate instead of the minimum qualifying rate — the greater of your contract rate plus 2% or 5.25%. Miss any one and you are back to the full test.
"No stress test" is not "automatic approval". The new lender still underwrites your income, your credit and your property. The exemption removes an artificially inflated rate hurdle; it does not remove underwriting.
What a switch costs
At renewal there is no prepayment penalty, because your term has ended and there is nothing to break. The remaining costs are modest and frequently covered.
| Cost | Typical treatment |
|---|---|
| Prepayment penalty | None at renewal. Mid-term, this is the big one — see penalties. |
| Legal / title fees | Many lenders cover these on a straight switch to win the business. Always ask before choosing. |
| Appraisal | Often covered or waived on a switch, particularly where there is substantial equity. |
| Discharge fee (outgoing lender) | Charged by the lender you are leaving. A modest administrative amount set out in your contract. |
| Collateral charge discharge | If your current mortgage is a collateral charge, expect a full discharge and new registration, and the legal cost may fall on you. |
Treatment varies by lender and by file. Ask what is covered before you commit; it frequently decides which offer is genuinely better.
When a switch is worth it — and when it is not
Worth it: a meaningful rate gap
If a new lender beats your renewal offer by enough to clear the switching costs over the term, the arithmetic is simple. On a typical GTA balance even a modest gap compounds into real money across five years.
Worth it: you could not pass the stress test
This is the group the November 2024 change was aimed at. If your income has not kept pace with your balance, a straight switch is now a genuine option where it previously was not.
Worth it: better terms, not just a better rate
Moving from a collateral charge to a standard charge, or to a lender with a fairer penalty calculation and better prepayment privileges, can be worth more over time than a small rate difference.
Not worth it: your lender matched the market
Sometimes they do. If your current lender's renewal offer is competitive, staying is less work and costs nothing. I will tell you when that is the case.
Not worth it: the balance is small or the term is short
Switching costs are largely fixed. On a small remaining balance or a one or two-year term, the saving may not clear them.
Needs care: you want cash out as well
The moment you add money to the balance it is no longer a straight switch — the stress test applies and it becomes a refinance. Still often worth doing; just a different test and a different cost structure.
How a switch runs
Allow two to four weeks. Start 90 to 120 days before your maturity date and none of it is rushed.
- Send me your renewal offer and your current termsBalance, rate, maturity date, lender, and whether it is a standard or collateral charge. If you do not know the charge type, I can usually work it out.
- I price the market against it30+ lenders, and I check what each covers on a switch, not just the rate. The cheapest rate with uncovered legal fees is sometimes the worse deal.
- You see a straight comparisonIncluding staying put. If your current offer wins, that is the recommendation.
- Application and approvalUnderwriting on income, credit and property — at the contract rate, if it is a straight switch.
- Lawyer or title companyThey handle the discharge of the old mortgage and registration of the new one. Nothing changes about your home or your occupancy.
- New payments begin at maturityThe transition lands on your maturity date, so there is no overlap and no double payment.
Honest answers
Is there a stress test when switching mortgage lenders?
How long does a mortgage switch take in Canada?
Who pays the legal fees on a mortgage switch?
Can I switch lenders if my mortgage is a collateral charge?
Can I switch my mortgage before renewal?
What are the mortgage transfer fees in Canada?
Will I need a new appraisal to switch?
Does my mortgage balance change when I switch?
Related
Find out whether switching is worth it for you
Send me your renewal offer and current terms. You'll get a straight comparison, including the option of staying where you are.
Aleksey Tsoy · Mortgage Agent (Level 1) · Licence #M20001520 · Centum Financial Services LP · Brokerage Licence #13054