Since November 21, 2024, borrowers with an existing uninsured mortgage can move to a new federally regulated lender at renewal without being required to pass the mortgage stress test, as long as the loan amount and amortization don't increase. OSFI calls this a "straight switch," and OSFI confirmed the exemption took effect on that date. It gives more renewing borrowers the freedom to shop for a better rate at another lender without the qualifying rate acting as a barrier.
What qualifies as a straight switch
A straight switch means moving your existing mortgage balance from one federally regulated lender to another at renewal, without increasing the loan amount and without extending the amortization back out. If you're borrowing more money, consolidating debt into the mortgage, or resetting your amortization back to a longer period, the transaction no longer qualifies as a straight switch, and standard stress test rules apply to the new lender's assessment of your application.
Why this exemption was introduced
Before this change, borrowers renewing an uninsured mortgage with a new lender had to requalify using the Minimum Qualifying Rate, even if they'd been making payments reliably on the same balance for years without issue. That requirement sometimes locked borrowers into staying with their existing lender at renewal, since they couldn't be sure they'd qualify elsewhere if rates had risen since their original approval. OSFI's exemption removes that barrier for switches that don't increase the borrower's overall risk profile.
How this compares to insured mortgages
Insured mortgages have had a similar exemption for longer. The Canadian Mortgage Charter, released in October 2023, reaffirmed that insured borrowers can switch lenders at renewal without being subject to the mortgage stress test. The straight switch rule extends a comparable benefit to uninsured borrowers, closing a gap between how insured and uninsured renewals had been treated up to that point.
What lenders still check
Even without the prescribed stress test, lenders don't skip underwriting entirely on a straight switch. They still assess these applications under OSFI's B-20 guideline, which covers sound lending practices like verifying income, reviewing credit history, and confirming the mortgage still fits the borrower's overall financial picture. The difference is that lenders aren't required to apply the 5.25%/contract-plus-2% qualifying rate specifically to these transactions.
Why this matters at renewal
Without the straight switch exemption, some borrowers found themselves effectively stuck with their current lender at renewal, since a rate increase since their original approval could mean they wouldn't pass the stress test at a different institution. Now, eligible borrowers can shop their renewal across federally regulated lenders and switch if they find better terms, without that qualifying rate acting as a barrier to moving their mortgage elsewhere.
Getting your renewal reviewed
A mortgage broker can help confirm whether your renewal qualifies as a straight switch under OSFI's definition and can compare offers across multiple federally regulated lenders on your behalf. Since eligibility hinges on details like whether your loan amount or amortization changes, it's worth having your renewal reviewed well before your current term ends so you have time to shop around properly.
Timing your renewal shopping
Lenders typically send renewal offers weeks or months before your term ends, and that offer isn't the only option available to you. Because the straight switch exemption removes the stress test barrier for eligible uninsured borrowers, comparing your existing lender's renewal offer against other federally regulated lenders has become more practical for many homeowners than it was before November 21, 2024. Starting that comparison early gives you time to gather documents and confirm your straight switch eligibility before your current term expires.
Have questions about your situation? An advisor can walk you through it.