Canadian Mortgage Renewal vs Refinance Calculator
At term end, compare your lender's renewal offer against market rates. Understand when re-qualifying is worth the switching cost, and how to negotiate effectively. All figures in CAD.
Your lender's first renewal offer is almost never their best rate. They rely on customer inertia — most borrowers simply sign and return the renewal letter. A broker with a competing offer in hand typically achieves better results.
Canadian mortgage renewal is a negotiation — not a take-it-or-leave-it situation. Lenders know that moving costs money for the borrower, so they post renewal rates above market. Here is how to negotiate effectively.
- Receive your lender's renewal offer (typically 90–120 days before term end)
- Contact 2-3 competing lenders and your bank's broker for competing rates
- Call your current lender's retention team: "I have received an offer at 4.9% from another lender. Can you match it?"
- If they offer a partial reduction — push further: "My switching costs are CA$1,000. To make it worthwhile I need the rate down to at least 5.00%%"
- Get any improved offer in writing before committing
- If lender will not match — switch. Your break-even is 9 months
How to Use This Canadian Renewal vs Refinance Calculator
Enter your outstanding balance, amortization remaining, your lender's renewal offer rate, and the best market rate available. The calculator shows the monthly saving from switching, the stress test impact, and whether the switching cost is justified.
Renewal vs Refinancing — Key Distinction
In Canada, renewing with your current lender at term end requires no re-qualification and no stress test. Refinancing — switching to a new lender — requires a full mortgage application and stress test at the higher of your new rate plus 2%, or 5.25%. This is a significant practical difference, especially if your financial situation has changed since you first obtained your mortgage.
Advanced and Pro Tiers
The Advanced tier compares your lender's offer against broker market rates, models the stress test re-qualification risk based on your income, and shows the break-even timeline for switching costs. The Pro tier provides a step-by-step negotiation script, models early renewal scenarios, and compares variable vs fixed rate options at renewal.
Canadian Mortgage Payment Formula
Monthly Rate = (1 + Annual Rate ÷ 2)^(1/6) − 1
Monthly Payment = Balance × [r(1+r)^n] / [(1+r)^n − 1]
Where r = monthly rate, n = remaining months
OSFI Stress Test Rate = Max(Qualifying Rate + 2%, 5.25%)
Canadian mortgages compound semi-annually by law — this is different from most countries and means the effective rate is slightly different from the nominal rate. At 5%, the effective annual rate is 5.0625%.
Example: The Nguyen Family at Renewal
Renewing a $420,000 Mortgage in Ontario
The Nguyens bought in 2020 at 2.1% on a 5-year fixed term. At renewal in 2025, their lender offers 5.65%. A broker finds 4.95% from a competing lender.
| Balance at Renewal | $380,000 |
| Original Rate | 2.1% |
| Lender Renewal Offer | 5.65% |
| Broker Market Rate | 4.95% |
| Monthly Payment (Offer) | $2,492 |
| Monthly Payment (Market) | $2,338 |
| Monthly Saving | $154 |
| Switching Cost | $1,200 |
| Break-Even | 8 months |
| 5-Year Net Saving | $8,040 |
The Nguyens called their lender's retention team with the competing offer. The lender matched 5.05% — saving $130/month with zero switching costs, a net saving of $7,800 over 5 years just for making one phone call.