Category: Blogs,Mortgage Tips & Advice

You May Not Have to Pass the Stress Test Again

Most people open their renewal letter, look at one number, and sign.

I understand why.

The letter arrives. The rate looks reasonable. Signing takes two minutes and shopping takes an afternoon you don’t have.

But there’s something that changed a couple of years ago that most homeowners still haven’t heard about. And it quietly removed the biggest reason people stayed put.

In many cases, you can now move your mortgage to a different lender at renewal without re-qualifying under the stress test.

Why that matters more than it sounds

For years, the honest answer to “should I shop my renewal?” was often:

“You can try. But you might not qualify anywhere else.”

That was the real barrier.

Not loyalty. Not laziness. Qualifying.

If your income had shifted, or you’d taken on a car loan, or you’d gone self-employed since you first got the mortgage, the stress test at a new lender could stop the move cold. So people stayed. And lenders knew it.

That’s no longer the default answer.

What actually changed

In November 2024, OSFI removed the minimum qualifying rate — what most of us call the stress test — for uninsured “straight switches” between federally regulated lenders.

A few weeks later, in December 2024, the federal government aligned the mortgage insurance rules so comparable insured mortgages got the same treatment.

A straight switch is narrower than it sounds. Here’s what it means:

• You’re moving an existing mortgage from one federally regulated lender to another
• The loan amount doesn’t increase — except by up to $3,000 to cover transaction costs
• The remaining amortization doesn’t get extended
• You’re not taking equity out

If your renewal fits inside those lines, the new lender isn’t required to qualify you at the stress test rate.

And here’s what it doesn’t mean

This is where I want to be careful, because I’ve seen this get oversimplified.

It is not a guarantee of approval.

Lenders still verify your income. They still underwrite. They still set their own qualifying policies, and some have adopted this fully while others have barely adopted it at all.

Credit unions are provincially regulated, so they sit outside these federal rules entirely — though many have their own comparable approach.

The rule opens the door.

It doesn’t walk you through it.

The part most people don’t realize

The Financial Consumer Agency of Canada published research this past March on how Canadians actually behave at renewal.

One in five never compared lenders at all.

Thirteen per cent didn’t know they could negotiate the rate or the terms.

And 37% chose their current lender mainly because they already banked there.

I’m not sharing that to make anyone feel foolish. Renewal forms are designed to be easy to sign — that’s not an accident.

But on a $500,000 balance, even a modest difference compounds into real money over a five-year term. And all the effort lands in one short window.

Start four months out

You’ve heard me say this before, and I’ll keep saying it.

Your lender only has to send you a renewal statement 21 days before your term ends. That’s the legal minimum. It is not a planning horizon.

Four months out is where the real options are.

Four months before: Pull your renewal date and balance. Check your credit. Note what’s changed since you last qualified — new job, self-employment, a car loan, a second property.

Three months before: Compare what’s available. Most lenders will hold a rate for 90 to 120 days, so this is where you protect your downside while you think.

Two months before: Decide on structure, not just rate. Fixed or variable. Term length. Prepayment privileges. How the penalty is calculated if you ever need to break early. These terms often matter more than a few basis points.

One month before: Sign, and make sure it clears before your maturity date — so you’re never rolled onto a posted rate by default.

Sometimes the answer is to stay

Shopping doesn’t obligate you to leave.

FCAC’s own guidance encourages borrowers to negotiate with their current lender, and notes that a competing offer strengthens your position.

Plenty of my clients shop, bring the number back to their existing lender, and stay — at a better rate than the one they were first offered.

That’s a good outcome.

Maybe your current lender matches it and you stay.

Maybe a switch gives you better terms, not just a better rate.

Maybe you look at everything and conclude your existing mortgage is already the right one.

That’s a perfectly good outcome too.

There isn’t one answer that applies to everyone. The point of looking isn’t to create a transaction — it’s to know what was actually on the table before you sign.

Where this gets more complicated

If you want to do more than move the mortgage as-is — add to the balance, extend the amortization, consolidate debt — you’ve stepped outside the straight switch definition.

Those are full applications. They’re stress-tested. They may still be exactly the right move for you, but they should be evaluated on their own merits rather than folded quietly into a renewal.

That’s a different conversation, and worth having on purpose.

The Bottom Line

Rates are relatively steady right now. The Bank of Canada held in early September, and the next scheduled announcement is October 28.

So this isn’t about timing the market. It never really is.

It’s about knowing that a door most people assume is closed has actually been open since late 2024 — and making sure you don’t sign the first offer without knowing what else was there.

Everything here is general information about how renewals and the current rules work in Canada. Whether a switch makes sense for you depends on your mortgage, your lender, your income, your credit and your plans for the property.

Which is exactly the conversation worth having before you sign anything.

If your mortgage is renewing in the next six months, I’d be happy to review your options with you.

Book your free mortgage renewal review here: 👉 askanacruz.ca/book-a-call

📞 Let’s review your mortgage solutions—it just makes “cents”!

Talk soon,

Ana

Mortgages can be complicated; we are here to help you make “cents” of it.

We focus on Mortgage Solutions, Period!

To learn more connect with Ana Cruz 905.870.0513 or email at ana@askanacruz.ca