Renewing in 2026? You No Longer Need to Pass the Stress Test to Switch Lenders
If your mortgage is coming up for renewal this year, here’s something your bank probably won’t mention: it has never been easier to shop around.
For years, one of the biggest barriers to switching lenders at renewal was the mortgage stress test. Even if you had made every single payment on time, moving your mortgage to a new lender meant re-qualifying at a rate roughly 2% higher than the one you were actually offered. For a lot of homeowners, that was enough to make them sign the renewal letter their bank mailed them, even when better rates were sitting on the table elsewhere.
That barrier is gone.
What changed
In late 2024, OSFI (Canada’s banking regulator) removed the stress test requirement for what’s called a “straight switch.” That means if you move your existing mortgage to a new lender at renewal, with the same loan amount and the same remaining amortization, you qualify at the actual contract rate, not the inflated stress test rate.
Insured borrowers (those who bought with less than 20% down) already had this flexibility. Now uninsured borrowers, who typically put 20% or more down, finally have it too. The regulator’s own reasoning? The playing field between borrowers wasn’t fair, and the risks the rule was meant to address never really materialized.
The practical effect is simple: your bank no longer has you cornered at renewal.
Why this matters so much in 2026
A huge wave of Canadians who locked in during the ultra-low-rate pandemic years have been renewing through 2025 and 2026, many facing noticeably higher payments. At the same time, the Bank of Canada has held its policy rate at 2.25% since the fall, and rates are meaningfully lower than they were at the peak.
When payments are going up, even a small rate difference matters. On a $500,000 mortgage, a 0.25% difference works out to roughly $70 a month, or over $4,000 across a five-year term. That’s not pocket change, and it’s exactly why lenders count on renewal-letter autopilot.
What a renewal review looks like
When we review a renewal together, we look at more than just the rate:
· Your current lender’s offer versus what the broader market is offering, because the first renewal letter is rarely the best one
· Fixed versus variable, which is a real conversation again. Variable has become the most popular choice among Canadian borrowers this year, but the right answer depends on your budget and your tolerance for movement
· Your bigger picture, like whether it makes sense to consolidate other debt, adjust your amortization, or tap equity for renovations while we’re at it (note: those changes go beyond a straight switch, so different rules apply, and we’ll walk you through them)
· Rate holds, which can protect a rate for up to 120 days before your renewal date, so there’s a real advantage to starting early
The bottom line
Your renewal is one of the few moments in your mortgage where you hold the leverage. The stress test no longer stands between you and a better deal, and lenders know it. The worst thing you can do is sign the first offer that lands in your mailbox.
If your mortgage comes up for renewal in 2026 (or even early 2027), reach out about four to six months ahead and we’ll make sure whatever you sign is actually your best option. The review costs you nothing, and it could save you thousands.
