Mortgage renewal in Ontario
Ontario balances are big, so the gap between a renewal letter and a competing offer adds up fast. Switching at maturity carries no penalty and no land transfer tax.
Have an agent review my Ontario renewalHow does a mortgage renewal work in Ontario?
When your term matures you sign a new term for the balance, either with your current lender or a new one. The federal rules are the same as anywhere in Canada: no prepayment penalty at maturity, and a straight switch generally avoids a new stress test at a federally regulated lender.
What is specific to Ontario is the paperwork and the cost picture. No land transfer tax applies because ownership is not changing, your broker is licensed by FSRA, and the switch is registered electronically against your title by a lawyer or title company.
- No Ontario or Toronto land transfer tax applies to a renewal or a lender switch.
- Mortgage brokerages and agents in Ontario are licensed by FSRA.
- The switch is completed by a lawyer or title company through Ontario's electronic land registration system.
- Start 90 to 120 days before maturity; most switches take two to four weeks.
What is different about renewing in Ontario
FSRA-licensed brokers
In Ontario, mortgage brokerages, brokers and agents are licensed by the Financial Services Regulatory Authority of Ontario (FSRA) under the Mortgage Brokerages, Lenders and Administrators Act, 2006. That matters at renewal because the brokerage has to put certain things in writing before you commit: which lender you are going to, any fees you pay, and any conflicts of interest. On a standard residential switch the lender pays the brokerage, so there is normally no fee to you. You can check any agent's licence on FSRA's public registry. 8Twelve Mortgage is licensed in Ontario as a mortgage brokerage (FSRA #13072).
No land transfer tax on a switch
Ontario land transfer tax, and the extra municipal tax in Toronto, are triggered by a change in ownership. A renewal or lender switch changes who holds the mortgage, not who owns the home, so neither tax applies. Your costs are limited to the discharge or assignment fee your current lender charges, registration, and legal or title fees. On a straight switch many lenders cover some or all of those.
How discharge and registration work
Your mortgage is registered as a charge against your property's title. When you switch, the new lender's lawyer or title company handles it through Ontario's electronic land registration system. Usually the old lender's charge is discharged and a new charge is registered for the new lender on the same day the funds move. Some lenders instead take a transfer (assignment) of the existing charge, which can keep costs down. Either way you don't need to visit a lawyer's office for a straight switch in most cases, and the old lender is paid out directly.
Three Ontario renewal scenarios
These are illustrative examples. Rates are assumptions chosen to show the arithmetic, not current quotes, and payments use semi-annual compounding and are rounded.
1. GTA condo owner renewing a straight switch
A one-bedroom-plus-den owner in midtown Toronto has $420,000 left with 25 years of amortization. The renewal statement offers 4.69% for five years. Another lender will do 4.19% on a straight switch.
Condo files have their own wrinkles. Lenders count part of the condo fee in your debt ratios, and some limit very small units or buildings with a high share of rentals. A broker who knows which lenders are comfortable with the building saves a wasted application. See our notes for Toronto homeowners and condo owners in Mississauga.
2. Ottawa public-sector household
A couple in Barrhaven, both federal employees, owe $520,000 with 20 years left. Their bank offers 4.59%. Stable salaried income makes them an easy file for most lenders, and a competing lender quotes 4.19%.
Households like this often have options beyond the rate: a shorter term if they expect to sell, stronger prepayment privileges to put bonuses or savings to work, or matching payments to pay day. Our Ottawa mortgage broker page covers the local market.
3. Hamilton or Kitchener homeowner switching to fund a renovation
A detached home in Hamilton's east end is worth about $850,000 with $380,000 owing and 20 years left. The owners want $80,000 to finish the basement as a legal secondary suite. Adding to the balance makes this a refinance, not a straight switch, but doing it at maturity means no prepayment penalty.
Because it is a refinance, the owners re-qualify at the stress-test rate (the greater of the contract rate plus 2% or 5.25%) and an appraisal is normally required. Some lenders will consider projected rent from the suite. If the work will be paid for in stages, a line of credit beside the mortgage can be a better fit than a lump sum. The same approach works in Kitchener-Waterloo, Burlington or Oakville. See mortgage options in Hamilton for local details.
Renewing or switching in Ontario, step by step
- 1
Count back 120 days
Find the maturity date on your Ontario mortgage statement and start comparing four months out.
- 2
Collect your figures
Outstanding balance, remaining amortization, payment amount, and condo fees if you own a condo.
- 3
Compare offers through an FSRA-licensed broker
Put your renewal statement beside offers from other lenders on the same term, and read the broker's written disclosure.
- 4
Apply and lock a rate hold
Apply with the new lender, send income and property documents, and secure the rate while the file is underwritten.
- 5
Lawyer or title company registers the change
The old charge is discharged (or assigned) and the new lender's charge is registered electronically before your term ends.
Costs and timing to plan for
- No prepayment penalty at maturity, and no land transfer tax.
- A discharge or assignment fee from your current lender, plus registration and legal or title fees. Ask whether the new lender covers them.
- An appraisal if you are borrowing more or the property is rural or unusual; often an automated valuation on a straight switch.
- Two to four weeks from application to funding. Allow extra time in spring and around month-end, when lawyers are busiest.
For the general rules that apply across Canada, read our guide to renewing a Canadian mortgage. To see where Ontario rates sit before you talk to your lender, check current Ontario mortgage rates, and run your balance through the mortgage renewal calculator. Our Ontario mortgage broker hub lists every city we cover.
Free Ontario renewal review
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Ontario mortgage renewal questions
Do I pay Ontario land transfer tax when I switch lenders at renewal?
No. Ontario land transfer tax, and Toronto's municipal land transfer tax, apply when ownership of a property changes. Moving your mortgage to a new lender at renewal does not change ownership, so neither tax applies. You pay discharge or assignment and registration costs only, and many lenders cover some or all of them on a straight switch.
Who regulates mortgage brokers in Ontario?
The Financial Services Regulatory Authority of Ontario (FSRA) licenses and supervises mortgage brokerages, brokers and agents under the Mortgage Brokerages, Lenders and Administrators Act, 2006. A licensed brokerage has to disclose in writing which lender it is placing you with, any fees, and any conflicts of interest before you commit.
How long does a mortgage switch take in Ontario?
Plan on two to four weeks from application to funding, longer around month-end or in busy spring markets. Starting 90 to 120 days before maturity leaves time for underwriting, a valuation if needed, and for the lawyer or title company to register the change before your term ends.
Is my Ontario bank's renewal offer negotiable?
Yes. The rate on a renewal statement is a starting point. Lenders often improve the offer when you show a written quote from another lender, because keeping the mortgage is worth more to them than the discount.
Can I add money for a renovation when I renew in Ontario?
Yes, but it becomes a refinance rather than a straight renewal. The new balance can be up to 80% of the appraised value, you re-qualify at the stress-test rate, and an appraisal is usually required. At maturity there is no prepayment penalty, which is why many Ontario homeowners time a renovation refinance with their renewal.
Will I need a new appraisal to switch my Ontario mortgage?
Not always. On a straight switch with plenty of equity, many lenders rely on an automated valuation, especially in well-covered markets like Toronto, Ottawa and Hamilton. A full appraisal is more likely if you are borrowing more, the property is rural or unusual, or the loan-to-value is close to the lender's limit.
Renewing in Ontario this year?
Send us your renewal statement. An FSRA-licensed agent will compare it against the best available Ontario rates and tell you whether staying or switching makes more sense.
Ask an agent about your renewalBest available rate from 8Twelve's lender panel, subject to qualification and lender approval. OAC. Your rate depends on your individual financial situation.
Related services and tools
Related services
- Breaking your mortgage to refinance: Replace your mortgage mid-term to change the rate, the amortization or the amount you owe.
- Paying off high-interest debt with home equity: Pay out credit cards and loans with home equity so one payment replaces several.
- A revolving line secured on your home: A revolving credit line secured on your home that you draw on and repay as needed.
- Borrowing against your home's value: Borrow a lump sum against your home's value for a purchase, an investment or a family need.