Mortgage Renewal in Calgary

Do I have to pass the stress test to renew or switch lenders in Calgary?

No, if it's a straight switch. That means the same balance and the same remaining amortization, moved to a new lender at maturity. Renewing with your current lender has never needed the stress test.

For insured mortgages, the balance can rise by up to $3,000 to cover switching costs, with no cash taken out. If you want to add money, stretch the amortization or combine a line of credit, the lender treats it as a refinance, and the stress test applies again.

Should I switch lenders at renewal?

Switch when another lender's whole offer beats the one in your letter, and compare more than the rate. At maturity there's no penalty for leaving, so the only question is which terms serve you for the next 5 years.

• Prepayment room: how much extra you can pay each year without a fee.
• Penalty formula: how the lender calculates the cost if you sell or break early. This varies a lot between banks and other lenders.
• Portability: whether you can take the mortgage to your next home.
• Switching costs: many lenders cover appraisal and legal fees on a switch. If a new mortgage is registered, the Alberta land titles fee on a $400,000 balance is $450.

How do falling Calgary condo prices affect my renewal?

For an uninsured mortgage, most lenders will only take a switch if the balance is 80% of the home's value or less. A lower appraisal on a condo can push you over that line even though you've paid down the mortgage.

An example with labelled lines:

• Bought an apartment for $320,000 with 20% down
• Original mortgage: $256,000
• Balance at renewal: $245,000
• Appraisal at today's benchmark: $295,400
• 80% of today's value: $236,320
• Balance as a share of value: 83%

At 83%, most lenders won't take that file as an uninsured switch. You could renew where you are, or pay the balance down by $8,680 to get to 80%. If your mortgage was insured when you bought, the insurance stays with the mortgage on a straight switch, and many lenders will accept it without the 80% test. Check your value before you rely on a switch.

When should I start my Calgary mortgage renewal?

Start several months before your maturity date. Many lenders will hold a renewal or switch offer for a few months, so starting early lets you lock an offer and still take a better one if it appears.

1. Find your maturity date, balance and remaining amortization on your last statement.
2. Decide whether you plan to sell, add money or stay put for the next term.
3. Get an estimate of your home's value, which matters most for condo owners.
4. Compare your lender's offer against switch offers side by side.

Our renewal calculator puts your offer next to the alternatives.

What if I plan to sell or move during my next term?

Then the penalty formula matters more than the rate. On a fixed mortgage, most lenders charge the greater of 3 months' interest or an interest rate differential, and the second one can run many times higher at some banks. On a variable mortgage, most charge 3 months' interest.

A shorter term or a variable mortgage can cost less overall if you expect to sell. The guide to renewing when you plan to sell works through the choice.

What if my lender won't renew my mortgage?

A lender can decline to renew after missed payments, a large drop in income or a property issue. You still have options, including other banks, credit unions and alternative lenders, and starting early gives you the most of them. See the guide to a denied renewal.