Mortgage renewals: rate holds, the float-down, and the 2024 rule that makes switching lenders easier
If your mortgage renews in the next four months, the rate you'll pay for the next five years is being decided right now, not on the day you sign. Most people wait for the renewal letter, read the number, and sign it. But you can lock in a rate months ahead, for free, and still take a lower one if rates fall. It takes one phone call.
What's happening right now
Fixed mortgage rates follow the 5-year Government of Canada bond yield, not the Bank of Canada's rate. That yield sat around 2.6% before late February. By the end of September, it had climbed above 3.7%, and several big lenders raised their 3- and 5-year fixed rates again on September 29.
The Bank of Canada has held its rate at 2.25% for seven consecutive decisions. On September 2 it warned that the risk of higher inflation had grown, and its next decision is October 28. Nobody knows which way that goes, which is the point. A rate hold means you don't have to guess.
This matters for a lot of households. The Bank of Canada estimated that about 60% of Canadian mortgages will renew in 2025 or 2026. For people coming off 5-year fixed terms this year, payments are expected to rise by about 20% on average.
How a rate hold works
Most lenders will hold a rate for you 90 to 120 days before your term ends. It costs nothing and doesn't commit you to anything. If rates go up before renewal day, you keep the rate you held. If rates go down, you can ask for the lower one.
You can do this with your current lender and with a different one at the same time. That gives you two real numbers to compare instead of one letter to sign.
The fine print
- Get the float-down in writing. Few lenders will drop a held rate on their own if rates fall. Ask them to confirm, in writing, that you'll get the lower rate if it's available before you sign.
- Hold the rate, don't sign early. An early renewal is a contract. Once you sign it, a later drop in rates doesn't help you. A rate hold keeps your options open.
- Switching may be easier than you think. Since November 21, 2024, federal rules no longer require you to pass the mortgage stress test if you move your mortgage to a new lender at renewal, as long as the amount and amortization stay the same and your mortgage is with a federally regulated lender. If you're with a credit union or a provincial lender, ask how they handle it.
What it looks like in dollars
Here's an example, not anyone's real mortgage. Say you're renewing $400,000 with 20 years left. At 4.0%, the monthly payment is about $2,417. At 4.5%, it's about $2,522. That's roughly $105 a month, or about $6,280 over a five-year term, from a half-point move you had no control over.
A rate hold won't erase the jump most people face at renewal this year. It can stop that jump from getting bigger while you wait for the letter.
Why people miss this
Renewal feels like paperwork, not a decision. The letter shows up, the number looks reasonable, and signing is the easy option. Lenders know that, which is why the first offer isn't always the best one they'll give you. Asking for a hold, and asking a second lender for one too, changes the conversation from "here's your rate" to "what's your best rate?"
Try this week
Find your maturity date. It's on your last renewal agreement or your mortgage statement, and most lenders show it in online banking. If it's within four months, call your lender this week and ask for a rate hold. Then ask a second lender or a mortgage broker for one too.
- When exactly does my term end, and how many days ahead will my lender hold a rate?
- Will they confirm in writing that I get a lower rate if one becomes available before I sign?
- What would a second lender offer for a straight switch, same amount and same amortization?
When does your mortgage renew, and have you ever asked for a better rate than the first one offered?
Disclaimer: Education, not advice. These are my personal views, not my employer's. Your situation is your own, so check with a qualified professional before acting.
Sources: Bank of Canada, Staff Analytical Note 2025-21 · Canadian Mortgage Trends, Oct 1, 2026 · Money.ca on the September 2 rate decision · Ratehub on the OSFI switch rule · Homewise on rate holds