The client
A borrower in the Thetford Mines market let the maturity date get close before doing anything about the renewal statement sitting in their inbox — the existing lender's default offer of 6.05% was already loaded and ready to take effect through automatic renewal if nothing else happened.
Balance at maturity
$275,000
18 years left on the original amortization
Default renewal offer
6.05%
The existing lender's automatic rate if nothing is done
Time before maturity
About twelve days
When the file first reached a broker
Personal income
$100,800/year
$8,400/month for the ratio math
Other costs
Tax $295/mo, heat $130/mo
Counted alongside the new payment in TDS
Regulator
Mortgage broker / courtier hypothécaire
Quebec's Autorité des marchés financiers (AMF)
The problem
A lender's automatic renewal exists precisely so a mortgage doesn't lapse if a borrower does nothing — which also means doing nothing has a default price, here 6.05%, and it takes effect whether or not the borrower ever compares it to anything else.
The clock this file was actually racing
- ▸Balance at maturity: $275,000, 18 years remaining amortization
- ▸Default renewal payment at 6.05%: $2,081/month
- ▸Days remaining before that rate would lock in automatically: about twelve
Twelve days is tight for a full switch or transfer to a new lender, but it is not too late — a straight switch with no change to the loan amount or amortization moves faster than a purchase, and this file had time to spare.
The numbers
There is no purchase price on a renewal file — the comparison is simply the default offer against what shopping actually turns up, at the same remaining balance and amortization.
| Renewal comparison | Figure |
|---|---|
| Balance at maturity | $275,000 |
| Remaining amortization | 18 years |
| Default renewal rate (existing lender, illustrative) | 6.05% |
| Default renewal payment | $2,081 |
| Rate secured after shopping late (illustrative) | 5.15% |
| Payment at the shopped rate | $1,948 |
| Monthly savings from switching | $133 |
Because the loan amount and amortization did not increase, this qualifies as an uninsured straight switch, eligible for OSFI's stress-test exemption — so the late timeline was a documents-and-deadline problem to solve, never a requalification risk. The broader pattern behind renewals like this one is covered in our Canadian mortgage renewal statistics.
| TDS on the new payment | Monthly |
|---|---|
| New payment | $1,948 |
| Property tax | $295 |
| Heat (lender-standard estimate) | $130 |
| TDS $2,373 ÷ income $8,400 → 28.2% | ✓ |
The solution
A mortgage broker registered as a courtier hypothécaire with Quebec's AMF moved fast once the file arrived, treating twelve days as tight but workable rather than as a reason to default into the automatic renewal.
First, pulled the current mortgage statement and renewal statement the same day, confirming the exact balance, remaining amortization, and the date the default offer would take effect.
Second, shopped the file to a small shortlist of lenders that could move quickly on a straight switch, and coordinated the discharge and new registration through a notary from day one — in Quebec, a notary handles that step, not a lawyer, and building that into the timeline immediately is what kept twelve days workable.
The outcome
Switched and funded at 5.15% before the default 6.05% offer ever took effect, saving $133 a month on the identical remaining balance and amortization — and clearing the stress test entirely under OSFI's uninsured straight-switch exemption.
What to take from this file
- 01A lender's automatic renewal has a default price. Know it before deciding that doing nothing is fine.
- 02A straight switch, with no increase in loan amount or amortization, can still close inside a tight notice window — it moves faster than a purchase.
- 03Late doesn't take the OSFI stress-test exemption off the table. The exemption depends on the switch's structure, not the timeline.
- 04In Quebec, build the notary's discharge and registration work into the timeline from day one of a tight-deadline switch, not as an afterthought.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits — MQR exemption for uninsured straight switches at renewal (from Nov 21, 2024).
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸6.05% default renewal offer and 5.15% shopped rate — both illustrative; actual renewal offers and shopped rates are quoted at the time.
- ▸$295/mo tax and $130/mo heat estimates — lender-standard estimates, not rules.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.