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A seismic shift is underway in Canada's mortgage market. According to recent Equifax research, 56% of mortgage holders say they will explore refinancing with a different lender when renewal time arrives. This represents a fundamental change in how Canadians approach their largest financial obligation.
The numbers tell a compelling story. Nearly two-in-five mortgage holders - 41% - have actively considered switching lenders in the past year alone. Rising costs drive much of this movement. Canadian Lenders Association data shows mortgage payments are up nearly 10% year over year, squeezed by interest rate renewals and higher living costs across the board.
The pressure extends beyond monthly payments. A Royal LePage survey found that 57% of Canadians renewing their mortgage expect payment increases, with 81% of those anticipating real financial strain on their households. These aren't abstract concerns - they're reshaping how millions of homeowners think about their lending relationships.
This guide walks you through everything you need to know about switching mortgage lenders in Canada. We'll cover the financial case for switching, the process itself, and how to maximize savings regardless of which lender you choose. Whether you're approaching renewal or simply exploring options, understanding this can save you thousands.
Canada faces an unprecedented mortgage renewal wave. The scale demands attention from every homeowner with a mortgage approaching maturity.
More than 1.2 million Canadians will need to renew their existing mortgage terms in 2025, according to CMHC projections. Bank of Canada data paints an even broader picture - 60% of all outstanding mortgages in Canada will come up for renewal in either 2025 or 2026. This concentration creates both challenges and opportunities for borrowers willing to shop around.
CMHC's Residential Mortgage Industry Report explains the convergence. Borrowers who secured mortgages during the pandemic years of 2020 and 2021 are now reaching their first renewal dates. Simultaneously, homeowners who opted for shorter-term mortgages in 2022 and 2023 are also coming up for renewal. These overlapping waves create the massive renewal volume we're witnessing.
Total residential mortgage debt in Canada reached approximately $2.3 trillion by August 2025, up 4.8% from the previous year. This growth reflects both new purchases and refinancing activity as borrowers adjust to the current rate environment. Understanding where you fit in this matters for your credit score improvement strategy and overall financial planning.
Not all news points to higher payments. About 25% of borrowers may actually see payment decreases by the end of 2026, particularly those holding short-term fixed-rate mortgages or variable rates who locked in during higher rate periods.
Loyalty rarely pays in the mortgage market. The numbers make the case for shopping around compellingly clear.
You could save $13,857 on average by switching lenders versus simply renewing with your current bank. That figure represents real money that stays in your pocket over your mortgage term - funds you could redirect toward building stronger credit or paying down principal faster.
Cash bonuses sweeten the deal further. Some lenders offer up to $4,000 in cash for borrowers who switch, effectively paying you to move your mortgage. When combined with rate savings, the total benefit can exceed $17,000 over a typical five-year term.
The rate picture favors informed borrowers. At chartered banks, fixed-rate mortgages with 3 to less than 5-year terms now represent 43% of newly extended mortgages. This preference reflects borrowers hedging their bets in an uncertain rate environment while maintaining flexibility for future moves.
Competition works in your favor. According to Equifax, 38% of mortgage holders have already received refinancing offers from other financial institutions without even seeking them out. Lenders know the value of acquiring mortgage customers and price their offers accordingly.
Younger mortgage holders show particular willingness to shop around. A striking 62% of those under 35 plan to explore refinancing with different lenders at renewal time, compared to 52% of borrowers aged 35 and older. This generational shift toward active mortgage shopping is pushing lenders to compete harder for every customer segment.
Potential Savings from Switching Mortgage Lenders
| Savings Category | Typical Amount | Notes |
|---|---|---|
| Rate Negotiation | $13,857 avg | Switching vs renewing with bank |
| Monthly Payment | $100-$300/mo | Depends on rate difference |
| 5-Year Term Total | $6,000-$18,000 | Over full mortgage term |
| Renewal Shopping | 0.25%-0.75% | Typical rate reduction possible |
| Penalty Avoidance | $0 at renewal | No penalty when term ends |
Switching mortgage lenders doesn't make sense for everyone. Understanding your specific situation helps determine whether the effort and potential costs justify the switch.
Several factors indicate you're well-positioned to benefit from switching:
If your credit building efforts have paid off since you first obtained your mortgage, lenders may offer you significantly better terms than you originally qualified for.
Certain situations favor remaining with your current lender:
Among newcomers to Canada, 55% have considered switching financial providers. This group often starts with limited options due to thin credit files but can graduate to better products as they establish history. If you arrived recently, focus first on rebuilding your credit profile to access competitive rates when switching time comes.
Switching mortgage lenders involves several distinct phases. Understanding each step helps you navigate the process smoothly and avoid common pitfalls.
Start by gathering your current mortgage documents. You need to know your remaining balance, current interest rate, maturity date, and any prepayment penalties that would apply if you break your mortgage early. Review whether you have a standard charge mortgage (easier to switch) or a collateral charge mortgage (potentially more complex and costly to transfer).
Calculate your current home equity by subtracting your remaining mortgage balance from your home's estimated market value. Lenders will verify this through an appraisal, but having a realistic estimate helps set expectations.
Your credit score directly impacts the rates lenders will offer. Request your credit report from both Equifax and TransUnion to check for errors or issues that need addressing. Many Canadians discover mistakes that, once corrected, boost their scores significantly.
If your score needs work, explore options like credit cards designed for rebuilding or consider whether reporting your rent payments could help strengthen your profile before applying.
Contact at least four to five different lenders for rate quotes. Include your current bank, other major banks, credit unions, and mortgage brokers who can access multiple lenders. The Big 6 banks now hold 59% of the mortgage market, but credit unions at 18% and alternative lenders often offer competitive rates that major banks won't match.
When comparing offers, look beyond the interest rate alone. Consider:
Once you've selected a new lender, you'll complete a full mortgage application. This includes income verification, employment confirmation, and a property appraisal. The process mirrors getting a new mortgage, though some lenders it for switches with strong equity positions.
Gather these documents in advance:
Your new lender will work with a lawyer or notary to handle the actual transfer. Legal fees typically range from $500 to $1,000, though many lenders cover these costs for switchers. The process usually takes three to four weeks from application approval to completion.
While you're exploring better mortgage rates, discover how Neobanc lets you earn cashback on every mortgage payment you make.
Explore CashbackSwitching mortgage lenders isn't always free. Understanding potential costs helps you calculate whether the move truly benefits you financially.
Several costs may apply when switching mortgage lenders:
Many lenders absorb costs to attract switchers. At renewal time specifically, you typically avoid prepayment penalties entirely. Competitive lenders frequently cover legal costs, appraisal fees, and offer cash incentives that more than offset remaining expenses.
Use Neobanc's cashback calculator to model different scenarios. Factor in all costs, then compare against your total savings over the new mortgage term. A seemingly small rate reduction compounds significantly over five years on a large principal balance.
Typical Costs When Switching Mortgage Lenders
| Fee Type | Typical Range | Often Covered By New Lender |
|---|---|---|
| Discharge Fee | $200 - $400 | Sometimes |
| Assignment Fee | $50 - $300 | Yes |
| Appraisal Fee | $300 - $500 | Often |
| Legal Fees | $500 - $1,000 | Often |
| Title Insurance | $150 - $400 | Sometimes |
Your credit profile directly determines which rates lenders will offer. Strong credit opens doors to the best deals; weak credit limits your options and costs you money over your mortgage term.
Lenders segment borrowers by credit score when pricing mortgages. Generally, scores above 720 qualify for the best prime rates. Scores between 680 and 720 typically qualify for near-prime rates with slight premiums. Below 680, options narrow and rates increase, though mortgages remain available through alternative lenders.
If your score needs improvement before switching, establishing positive credit history through responsible credit card use can boost your score over several months.
Many Canadians worry that shopping for mortgage rates will damage their credit through multiple inquiries. The credit bureaus recognize this concern. When you apply for mortgages within a concentrated period - typically 14 to 45 days depending on the bureau - multiple inquiries count as a single inquiry for scoring purposes. Shop aggressively within this window without fear of credit damage.
If your renewal date is months away, use the time to strengthen your credit profile. Options include secured credit cards for guaranteed approval, easy approval credit products, and ensuring all existing accounts remain in good standing. Even small improvements to your score can translate to meaningful rate differences on a large mortgage.
Regardless of which lender you choose, your mortgage payments represent your largest monthly expense. Finding ways to extract additional value from these payments makes financial sense.
Traditional mortgage payments simply transfer money from your account to your lender with no additional benefit to you. However, newer payment methods have emerged that allow homeowners to earn rewards on their mortgage payments. At Neobanc, we've pioneered cashback on mortgage payments, turning your largest monthly expense into a source of returns.
Consider a typical Canadian mortgage payment of $2,500 monthly. Over a five-year term, you'll pay $150,000 in principal and interest. Even modest cashback percentages on this volume translate to hundreds or thousands of dollars in returns - money that effectively reduces your borrowing costs beyond whatever rate you negotiated.
The smartest approach combines competitive rates from shopping around with cashback on your actual payments. You can also apply similar strategies to other major expenses. Our bill payment cashback and rent cashback programs help Canadians extract value from expenses they'd pay anyway.
Your specific situation affects your switching strategy. Different borrower profiles face unique challenges and opportunities.
If you're coming up on your first mortgage renewal, you've gained significant experience and likely improved your financial profile since purchase. First-time buyers who originally had limited options due to thin credit files often qualify for substantially better rates at renewal. Shop aggressively - you may have more than you realize.
Self-employed Canadians face additional documentation requirements but shouldn't avoid switching out of convenience. Prepare two years of financial statements, corporate tax returns, and proof of business stability. Some lenders specialize in self-employed borrowers and offer competitive rates for qualified applicants.
Rental property mortgages typically carry higher rates than owner-occupied homes. When switching, ensure you're comparing rates specifically for investment properties. Landlords should also consider how their tenant payment processes might be affected during the transition period.
If your credit has suffered since you obtained your mortgage, switching may still benefit you - just with different lender options. Alternative credit products can help rebuild your profile while B-lenders and private lenders offer mortgage solutions for those who don't qualify with traditional institutions.
Navigating the mortgage market doesn't require going it alone. Various professionals can assist with your switching decision.
Mortgage brokers access products from multiple lenders and earn commissions from the lenders they place you with - not from you directly. This model incentivizes them to find you competitive rates across the market. Bank representatives, conversely, can only offer their institution's products but may have flexibility on rates for qualified borrowers.
Using both approaches often yields the best results. Get quotes from brokers to understand market rates, then use that information when negotiating with banks directly.
Mortgage switches require legal processing even though no property is changing hands. Real estate professionals can recommend lawyers experienced in mortgage transfers who complete the process efficiently.
For complex situations involving investment properties, self-employment, or significant assets, consulting a financial advisor ensures your mortgage decision fits your broader financial plan. They can help you evaluate whether paying down your mortgage faster versus investing elsewhere makes more sense given current rates.
Switching mortgage lenders offers significant benefits, but common mistakes can erode those gains. Avoid these pitfalls for a successful transition.
The lowest rate doesn't always mean the best deal. A mortgage with slightly higher rate but generous prepayment privileges might cost less overall if you plan to make extra payments. Similarly, harsh early-termination penalties can trap you in an unfavorable mortgage if your circumstances change.
Most lenders allow you to lock in new rates 120 days before your mortgage matures without penalty. Missing this window might leave you scrambling or accepting whatever your current lender offers by default. Set calendar reminders and start shopping early.
Collateral charge mortgages, for example, bundle your mortgage with a home equity line of credit under a single registration. While convenient, these can be costly to discharge when switching lenders. Standard charge mortgages transfer more easily. Know which type you have before committing to a switch.
Verbal rate quotes mean nothing. Get written rate hold commitments from every lender you're considering. Rates can change quickly, and a written hold protects you if markets move against you during your decision process.
The mortgage continues evolving. Understanding emerging trends helps you make decisions that serve you well beyond your next renewal.
Traditional mortgage processes involved extensive paperwork and in-person meetings. Increasingly, lenders offer fully digital applications with automated income verification and electronic document signing. These d processes reduce switching friction and encourage competition - good news for borrowers.
While the Big 6 banks increased their market share to 59% in 2025, credit unions and alternative lenders continue competing aggressively for mortgage business. Enterprise financial solutions are making it easier for smaller institutions to offer competitive products that challenge traditional bank offerings.
The concept of earning rewards on mortgage payments represents a fundamental shift in how Canadians think about their housing costs. As this market matures, expect more competition and better offers for consumers willing to explore these options.
Canadian Mortgage Market Share 2025
| Lender Type | Market Share | Change from 2024 |
|---|---|---|
| Big 6 Banks | 59% | +2.1% |
| Credit Unions | 14% | -0.8% |
| Monolines | 18% | -0.9% |
| Other Lenders | 9% | -0.4% |
Ready to explore switching mortgage lenders? Use this checklist to ensure you cover all bases.
For answers to common questions about mortgage payments and cashback opportunities, visit our FAQ section or explore our educational articles.
With 56% of Canadian mortgage holders planning to explore switching at renewal time, you're far from alone in questioning whether your current lender still serves you best. The potential to save nearly $14,000 on average makes this question worth serious consideration for every homeowner approaching renewal.
The current mortgage market favors active, informed borrowers. Lenders compete aggressively for business, offering rate discounts and cash bonuses that reward those willing to shop around. Whether you ultimately switch or use competitive offers to negotiate better terms with your current lender, the exercise of shopping around almost always pays dividends.
Remember that your mortgage payment represents just one component of your overall financial picture. Strategies that extract additional value from this expense - like earning cashback on payments - compound your savings beyond rate reductions alone. At Neobanc, we help Canadians turn their largest monthly expenses into opportunities for returns, regardless of which lender holds their mortgage.
Your next step? Learn more about how we help Canadians earn rewards on the payments they're already making, and start putting your money to work harder for you.
Make your mortgage switch work harder. Neobanc gives you cashback on every payment—money back in your pocket while you save on rates.
Start Earning CashbackSwitching mortgage lenders at renewal typically costs between $0 and $1,000 for most Canadians. Standard fees include legal costs for title transfer (around $500-800) and potential appraisal fees. However, many lenders waive these costs or offer cash bonuses up to $4,000 to attract new customers. If switching mid-term, prepayment penalties can range from three months' interest to the interest rate differential, potentially costing thousands. Collateral charge mortgages may incur higher discharge fees than standard charge mortgages.
The ideal time to start shopping for a new mortgage lender is 120 days before your renewal date. This window allows sufficient time to gather quotes from multiple lenders, compare offers, and complete the approval process without rushing. Starting early also provides leverage when negotiating with your current lender. According to market data, 38% of mortgage holders receive unsolicited refinancing offers from other institutions, but proactively shopping around typically yields better rates than waiting for offers to arrive.
Switching mortgage lenders has minimal impact on your credit score. The new lender will perform a hard credit inquiry during the application process, which may temporarily lower your score by a few points. However, this effect typically disappears within a few months. If you shop multiple lenders within a short period (usually 14-45 days), credit bureaus generally treat these as a single inquiry since they recognize you're rate shopping for one mortgage product.
Switching mortgage lenders with bad credit is possible but more challenging. Your options depend on your equity position and the severity of your credit issues. With at least 20% home equity, some alternative lenders and credit unions will consider your application despite lower credit scores. However, you may face higher interest rates than borrowers with strong credit. Improving your credit score before renewal can significantly expand your lender options and secure better rates.
To switch mortgage lenders, you need government-issued photo identification, proof of income such as recent pay stubs or tax returns, your current mortgage statement showing the balance and maturity date, property tax statements, proof of home insurance, and a recent property appraisal may be required. Self-employed borrowers typically need two years of business financial statements and Notice of Assessments. Having these documents organized before applying streamlines the approval process considerably.
The choice between fixed and variable rate mortgages depends on your risk tolerance and financial flexibility. Fixed rates provide payment certainty, which explains why 43% of newly extended mortgages at chartered banks are fixed-rate terms of 3 to less than 5 years. Variable rates may offer lower initial rates but carry risk if rates rise. About 25% of borrowers may see payment decreases by end of 2026, particularly those currently on variable rates during higher rate periods.
You can switch mortgage lenders either mid-term or at renewal, though the financial implications differ significantly. At renewal, switching is straightforward with minimal fees. Mid-term switches require breaking your current mortgage, triggering prepayment penalties that can amount to thousands of dollars depending on your mortgage type and remaining term. Calculate whether the rate savings from switching outweigh these penalties before proceeding with a mid-term transfer.
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