At renewal in Ottawa, how much can I save by switching lenders?
Your lender's renewal letter is an offer, not an obligation. Here is what moving your mortgage at maturity can save on an Ottawa balance, and what it costs.
Short answer
On a $542,810 balance (80% of Ottawa's October 2026 average price), a rate 0.5 point lower saves about $12,679 of interest over a 5-year term; a quarter point, about $6,347; a full point, about $25,289. At the end of your term you can move your mortgage to another lender for the same amount, with no prepayment penalty at maturity, and since November 21, 2024 an uninsured straight switch between federally regulated lenders no longer has to pass the stress test (OSFI). The costs are mainly setup fees (legal, discharge, registration or assignment, sometimes an appraisal), and many lenders will cover some of them: ask in writing (FCAC).
In Ottawa, the average home sold for $678,512 in October 2026 (Ottawa Real Estate Board figures). A buyer who put 20% down on that price would owe about $542,810. That is the balance used in every example below: replace it with yours. The question I hear most often at renewal is simple: is it worth leaving my bank? Here is the math, then the rules.
What switching can save on an Ottawa mortgage
Payotte's calculation, on a $542,810 balance with 20 years of amortization left, renewed for a 5-year term. Starting rate: the Bank of Canada's 5-year fixed reference rate, 4.58% (August 2026). Each row shows what a lower rate offered by another lender changes.
| Rate obtained | Monthly payment | Lower by | Interest saved over 5 years |
|---|---|---|---|
| 4.58% (reference) | $3,445 | — | — |
| 4.33% (0.25 point lower) | $3,373 | $72/month | $6,347 |
| 4.08% (0.5 point lower) | $3,302 | $142/month | $12,679 |
| 3.58% (1 point lower) | $3,163 | $282/month | $25,289 |
Canadian mortgage math (semi-annual compounding). Illustration only: the rates you are offered depend on your file and the lender. Subtract your switching costs from the saving to get the net gain.
The real question is not whether switching can pay, but how much the other offers beat your renewal letter by. You only find out by asking.
At maturity, switching is your right
The Financial Consumer Agency of Canada puts it plainly: at renewal, you can move your existing mortgage to another lender for the same amount. The new lender has to approve your application, and it may use different criteria than your current one. What you cannot do without cost is leave before the end of the term: for a fixed rate, the penalty is usually the higher of three months' interest or the interest rate differential. At maturity, that penalty does not exist. That is why the date on your renewal letter matters so much.
If your lender is federally regulated (a bank, for example), it must send your renewal statement at least 21 days before the end of your term. Twenty-one days is not enough to compare offers, have a file approved and arrange the transfer. Start a few months earlier.
The rule that changed in 2024: no new stress test for a straight switch
Until late 2024, moving an uninsured mortgage to a new lender meant re-qualifying at the higher stress-test rate. Many homeowners stayed put because of it. On November 21, 2024, OSFI stopped prescribing the minimum qualifying rate for uninsured straight switches between federally regulated lenders. Three conditions:
- Same amount: no equity take-out. The balance may grow by up to $3,000 to cover transaction costs.
- Same or shorter amortization: no increase in the remaining amortization.
- Lender to lender, both federally regulated. Lenders that OSFI does not regulate, such as credit unions, set their own rules: ask before you assume.
The new lender still underwrites your file like any new loan: income, credit, property. If you want to borrow more at renewal, it is no longer a straight switch: it becomes a refinance, with its own qualification.
What it costs to switch in Ontario
The FCAC lists the costs of switching at renewal: the new lender's setup fees, which may include legal, discharge, registration, transfer or assignment fees; an appraisal to confirm the value of the home, if needed; and other administration fees. There is no land transfer tax on a switch: you are moving a mortgage, not buying a property.
The FCAC's own advice is the one I give every client: ask the new lender whether it will pay some or all of the switching costs, and get the answer in writing before you sign. Compare offers on the total, not just the rate.
The timeline that works
- 4 to 6 months before maturity: gather your renewal date, balance and current rate; ask a broker to compare offers.
- 3 to 4 months before: choose a lender and have the file approved; ask in writing which costs it covers.
- The last weeks: sign the documents; the new lender pays off the old loan at maturity, with no penalty.
If your renewal letter has already arrived, it is not too late, but there is less room to negotiate. You can see my Payotte profile or compare with the other verified professionals in Ottawa.
Frequently asked questions
How much can I save by switching lenders at renewal in Ottawa?
On a $542,810 balance (80% of Ottawa's October 2026 average price) with 20 years left, a rate 0.25 point lower saves about $6,347 of interest over a 5-year term, 0.5 point about $12,679 and 1 point about $25,289. Payotte's calculation; your balance and the rates offered decide the real figure.
Can I switch mortgage lenders at renewal in Ottawa?
Yes. At maturity you can transfer your mortgage to another lender for the same amount; the new lender must approve your file. Start a few months before the end of your term: your current lender (if federally regulated) must send your renewal statement at least 21 days before maturity, which is too late to shop calmly.
Do I have to pass the stress test to switch lenders at renewal?
Not for an uninsured straight switch between federally regulated lenders since November 21, 2024 (OSFI), as long as the amount and the remaining amortization do not increase. The loan can grow by up to $3,000 to cover transaction costs, but no equity can be taken out. Lenders not regulated by OSFI, such as credit unions, apply their own rules.
What does it cost to switch lenders at renewal in Ontario?
Typically setup fees: legal or title work, discharge of the old mortgage, registration or assignment of the new one, and an appraisal if the new lender needs one. There is no prepayment penalty at maturity. Many lenders pay some or all of these costs to win the file: ask the new lender in writing which ones it covers, and compare offers on the total.
Is there a penalty to switch lenders before my renewal date?
Yes, if you leave before the end of the term: for a fixed rate, the penalty is usually the higher of 3 months' interest or the interest rate differential (FCAC). That is why the switch is planned for maturity.
Sources consulted November 11, 2026: OSFI, straight switches (Nov. 21, 2024) · FCAC, renewing your mortgage · FCAC, prepayment penalties · OREB, Ottawa October 2026 · Bank of Canada, 5-year fixed reference rate (August 2026)