When your mortgage term ends in Alberta, you have a renewal decision to make, not just a form to sign. You can stay with your existing lender on new terms, or move your mortgage to a different federally regulated lender, and since November 21, 2024, a straight switch at renewal no longer requires you to pass the mortgage stress test (Source: OSFI). Understanding your options before your renewal date arrives can save you meaningful money over the new term.
What Happens When Your Mortgage Comes Up for Renewal
Near the end of your mortgage term, your current lender will send a renewal offer, usually a few months before your term expires. This letter sets out a new rate and term, and in most cases you can accept it simply by signing and returning it. Nothing forces you to switch lenders at renewal, but nothing forces you to stay with your current one either. Your mortgage balance, amortization, and property haven't changed, only the term and rate are up for negotiation.
Why You Shouldn't Just Sign the Renewal Letter
Lenders count on renewal inertia. The rate on that first renewal offer is often not their best rate, and it may not reflect what a competing lender would offer you for the same risk profile. Signing without comparing means you could be paying more interest than necessary for the next term, sometimes for several years. Before you sign anything, it's worth finding out what else is available in the market, including from lenders you've never dealt with before.
The Straight-Switch Stress-Test Exemption
Normally, qualifying for a mortgage in Canada means passing the OSFI stress test, the Minimum Qualifying Rate, at the greater of your contract rate plus 2%, or a 5.25% benchmark rate, a rule set on June 1, 2021 and still in force today (Source: OSFI). That test can make it harder to qualify with a new lender even if you've comfortably carried your current mortgage for years. As of November 21, 2024, OSFI removed that requirement for a "straight switch", moving an existing uninsured mortgage to a new federally regulated lender at renewal, provided the loan amount and amortization don't increase (Source: OSFI). For Alberta borrowers, this matters: it means you can shop your renewal across federally regulated lenders without the stress test standing in the way, as long as you're not borrowing more or extending your amortization.
How a RECA-Licensed Mortgage Broker Helps You Shop Your Renewal
In Alberta, mortgage brokers and associates must be licensed by RECA, the Real Estate Council of Alberta, the independent body that regulates the profession under the Real Estate Act. RECA licenses two classes, Mortgage Associate and Mortgage Broker, and both are held to standards of conduct and disclosure. A RECA-licensed broker can compare your existing lender's renewal offer against rates and terms from other lenders on your behalf, and explain where the straight-switch exemption applies to your situation. Because brokers work with multiple lenders rather than just one institution, they're positioned to show you options your current lender won't volunteer.
A Simple Renewal Timeline to Follow
Start paying attention to your renewal roughly four to six months before your term ends. Once your lender's renewal offer arrives, treat it as a starting point for comparison, not a deadline to sign immediately. Use the weeks before your term expires to talk to a broker, compare offers, and confirm whether a straight switch makes sense for your circumstances. Aim to have a decision made before your current term actually expires, so you avoid being defaulted onto your lender's posted terms.
Have questions about your situation? An advisor can walk you through it.