What must the renewal statement include?
A federally regulated lender, such as a bank, must give you a renewal statement at least 21 days before the end of your term. FCAC lists what it must contain:
- The balance at renewal: what you'll owe on the day the new term starts.
- The interest rate offered for the new term.
- The payment frequency, such as monthly or every two weeks.
- The term of the renewal.
- Any charges connected with the renewal.
- A statement that the rate offered won't increase before the renewal date.
- Whether the mortgage will renew automatically if you take no action.
Is the rate in the letter the lowest my lender will offer?
Not necessarily. The statement is an offer, and nothing in it stops you asking for a lower rate or comparing other lenders. The Bank of Canada publishes major banks' posted rates every week; these are list prices that borrowers are often offered below, so being "below posted" doesn't settle whether a rate is competitive. Posted rates still matter after you sign: many lenders use them when they calculate an interest rate differential penalty, so read the penalty wording in the renewal documents too. See posted vs discounted mortgage rates.
A competing written quote is the most concrete thing you can bring to the conversation. The mortgage renewal script has wording you can use.
How do I tell whether the offered rate is fair?
Enter it in the renewal checker with your term and balance. For a fixed renewal, the benchmark is the Bank of Canada's effective rate on new fixed mortgages in the same term bucket (under three years, three to under five, or five years and over), moved by any later change in the matching Government of Canada yield and labelled as an estimate when moved.
An illustrative letter offering 5.09% for five years on $320,000 gets a mark of 54 out of 100 ("grade D"). It sits 0.75% above a best published rate of 4.34%, a gap worth about $11,254 over the 5-year term.
- Rate
- 5.09%
- Score
- 54
- Verdict
- grade D
- grade
- D
- Benchmark
- 4.34%
- typical
- 4.83%
- Gap
- 0.75%
- Direction
- above
- Cost vs benchmark
- $11,254
What is a better rate worth in dollars?
Suppose another lender quotes 4.79% in writing. Against the letter's 5.09%, that changes the payment by $51.70 a month and the interest over 5 years by $4,511, and leaves you owing $1,409 less at the end of the term.
Switching has its own costs, so run the full comparison in the renewal switch calculator or read switching lenders at renewal.
| At 5.09% | At 4.79% | |
|---|---|---|
| Monthly payment | $2,118.38 | $2,066.67 |
| Interest over 5 years | $74,334 | $69,822 |
| Balance after 5 years | $267,231 | $265,822 |
What if the letter offers a variable rate?
Grade it as a variable renewal. The benchmark becomes "the lowest published rate for the same term and insurance class in Ontario", moved by any policy-rate change since that month. In our example, 4.60% gets a mark of 47 out of 100 ("grade F") against 3.65%.
Before choosing between a fixed and a variable renewal, read how variable-rate payments work: the payment behaviour when prime moves matters as much as the starting rate.
- Rate
- 4.60%
- Score
- 47
- Verdict
- grade F
- grade
- F
- Benchmark
- 3.65%
- typical
- 4.15%
- Gap
- 0.95%
- Direction
- above
- Cost vs benchmark
- $14,421
What happens if I don't respond?
If the statement says the mortgage will renew automatically, it can renew on the terms in the letter without any further action from you. That may be fine, but it should be a choice rather than a default. Put the term end date in your calendar with a reminder a few weeks earlier, and if you're still comparing offers when the reminder arrives, call the lender and ask what it needs from you to keep your options open.
If your lender doesn't intend to renew, it must tell you at least 21 days before the term ends. That leaves little time to arrange a mortgage elsewhere, which is one reason to start comparing quotes months ahead. See our 120-day renewal timeline.
What else in the letter is worth checking?
If anything differs from your current agreement, ask the lender to explain the change in writing. The glossary defines terms such as amortization and interest rate differential.
- The payment amount and frequency, and whether they fit your budget.
- The remaining amortization, and whether it has changed.
- Any charges, with an explanation of each one.
- Prepayment privileges for the new term, and how any penalty would be calculated.
- Whether the rate type and term match what you expected.