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Committed to making your mortgage approval process stress free and efficient for over 25 years, Sunlite Mortgage is one of Canada’s leading mortgage brokerages.
If you’re renewing your mortgage or considering switching lenders, now is the time to explore your options. Changes to Canada’s mortgage rules give you more flexibility when transferring your mortgage, making it easier to secure a lower interest rate and reduce monthly payments. You could save thousands of dollars over your mortgage term with the right strategy.
Your mortgage renewal is a key opportunity to negotiate better terms. Many homeowners accept their lender’s renewal offer without shopping around and end up paying thousands of dollars more over their mortgage term. Banks often don’t offer their lowest rates upfront, assuming borrowers won’t take the time to compare.
By switching lenders, you can:
If you’re nearing renewal, now is the time to explore whether switching lenders can help you save more on your mortgage.
Previously, if you bought your home with less than a 20% down payment, your mortgage was insured by CMHC, Canada Guaranty, or Sagen (formerly Genworth). However, insurers wouldn’t cover the loan if you wanted to refinance, making it harder to get the best rates.
This rule has now changed.
Suppose you bought a $300,000 home five years ago with an insured mortgage. If you now want to switch lenders to get a better rate, your mortgage remains insured. This means you still qualify for the lowest rates available from banks and other lenders—potentially saving you thousands over your new term.
For example, on a $200,000 mortgage, even a 0.20% rate reduction could save you almost $1,900 over five years. That’s extra money in your pocket simply by switching lenders and securing an insured rate.
Not every mortgage qualifies for an easy transfer. Here are key factors to consider before making a switch:
Your Mortgage Type
Collateral vs. Standard Charge Mortgage
Mortgage Balance & Amortization
Costs of Switching
If you’re unsure whether switching is right, working with a mortgage broker can help you compare options and calculate your total savings.
If your mortgage is already insured, switching to a new lender allows you to keep that status and access lower rates. Banks and lenders offer their best discounts to insured mortgages because they carry less risk.
A collateral charge mortgage ties other forms of debt (such as a HELOC or a line of credit) to your home loan. These mortgages can’t be easily transferred to another lender. Instead, you’d need to refinance, which may involve legal fees and a new home appraisal.
If you have a standard charge mortgage, most lenders will cover your legal and appraisal fees when you sign a three-year term or longer. However, your current lender may still charge a discharge fee, typically around $250 to $400.
Before switching, use a mortgage rate comparison calculator to check whether the savings from a lower rate outweigh the closing costs. A mortgage broker can also help run the numbers to ensure that switching makes financial sense.
Even if you don’t refinance, some lenders allow you to add up to $3,000 in closing costs to your new mortgage. This means you don’t have to pay out-of-pocket appraisal fees, discharge fees, or penalties.
If you obtained your insured mortgage before October 17, 2017, you may not need to pass the stricter mortgage stress test when switching lenders. Some lenders allow you to qualify based on your actual mortgage rate rather than the Bank of Canada’s posted rate—making it easier to get approved.
If your home was originally purchased for under $1 million, you may still qualify for insured rates when switching lenders. However, homes valued over $1 million don’t qualify for default insurance, meaning higher rates may apply.
With these changes, many homeowners are moving away from big banks in favor of alternative mortgage lenders—also known as monoline lenders. These lenders, which specialize in mortgages, often provide:
✔ Lower rates on insured transfers
✔ More flexible approval criteria
✔ Better prepayment options
Banks are seeing a decline in insurable customers at renewal. As home values increase, more borrowers lose their insured status when refinancing—forcing them to accept higher rates from their current bank.
If you still qualify for an insured mortgage, switching to a monoline lender could help you secure a lower rate and better mortgage terms.
If you’re considering switching lenders, here’s how to get started:
Switching lenders can help you lower your mortgage rate, reduce payments, and save thousands. If you’re ready to explore your options, contact us today at (877) 385-6267 or contact a mortgage expert online.
