Renewal vs. refinance: two different events clients keep confusing.

A mortgage term — typically a few months to five years or longer — ends, and the borrower has to renew the contract or pay off the remaining balance. Nothing about the loan amount or amortization changes on its own; the client is simply agreeing to a new rate and term, either with the existing lender or a new one. See where the 2026 renewal volume is concentrated for the scale of what's coming through brokerages this year.

If the mortgage is with a federally regulated lender, the client must receive a renewal statement at least 21 days before the term ends, showing the balance, interest rate, payment frequency, and term. That statement is the trigger for a broker to start the “renew, switch, or refinance” conversation — not wait for the client to raise it.

Most renewals also aren't automatic in the client's favour. If a lender plans to auto-renew a mortgage without any action from the client, that intention has to be disclosed in the renewal statement — but an auto-renewal rarely comes with the lender's best available rate. A client who lets the deadline pass without shopping around is very likely leaving a better rate, from either the current lender or a new one, on the table.

A refinance increases the loan amount, extends the amortization, or otherwise renegotiates the original contract — often to access home equity or consolidate other debt. Because the loan itself is changing, the lender treats it as a new mortgage origination: full income and credit requalification, a new appraisal in most cases, and new registration.

Refinances are also subject to a hard ceiling: total secured debt against the home generally can't exceed 80% of its appraised value. A client asking to pull out equity beyond that limit isn't getting a bigger refinance — they're not eligible for one at all through a standard lender. This is a different conversation than the file preparation a broker would run through Treadstone's underwriting support for a straightforward renewal.

A refinance can also happen mid-term, not just at renewal — a client doesn't have to wait for their contract to come due to access equity or restructure their debt. The trade-off is that breaking a mortgage before the term ends almost always means paying a prepayment penalty on top of the standard refinance costs, which is a separate calculation from anything tied to renewal timing.

Effective November 21, 2024, OSFI stopped prescribing a minimum qualifying rate for straight switches of uninsured mortgages at renewal. Before that date, a borrower moving the same balance and amortization to a new lender at renewal had to qualify at the higher of the contract rate plus 2% or the Bank of Canada's benchmark rate — the same test used for a brand-new mortgage. That requirement no longer applies to a genuine straight switch.

Any increase in loan amount, any extension of amortization, and any new insured mortgage still require qualifying at the stress-tested rate. Lenders are also still expected to apply sound underwriting judgment on a straight switch — assessing the borrower's ability and willingness to service the debt — even without the prescribed minimum rate.

In practice, that means a lender can still decline a straight switch application, or ask for more documentation, even though the formal minimum qualifying rate no longer applies. The exemption removed a specific numerical hurdle, not the underwriting process itself — a broker preparing a switch file should still expect the new lender to review income, employment, and credit before confirming the transfer.

The registration side of a refinance also brings its own timeline — a fresh appraisal has to be scheduled and completed, title has to be searched, and the old charge discharged before the new one registers. None of that applies to a straight switch, which is one reason a refinance file needs to start weeks earlier than a comparable renewal.

1. 01Is the balance and amortization staying the same? If yes, it's a straight switch or a standard renewal.
2. 02Does the client want extra funds or a longer amortization? If yes, it's a refinance, and full requalification applies.
3. 03Does the client want to stay with the current lender or move? This decides the paperwork path, not the product type.

Sorting the request correctly before submission is the kind of detail Treadstone's fulfillment associates handle routinely during renewal season, so a broker's file doesn't stall mid-application over a mismatched product type.