Your renewal letter, decoded line by line
By Omar M.S. Hamed, founder, O.MS.H Media Inc., Ancaster ON. Last updated April 28, 2026 with current-week market rates. The Canadian mortgage renewal letter, decoded. What each line is, what is missing, and how to read it for what it actually is.
Your bank's renewal letter is a four-paragraph document that determines five years of your monthly cashflow. The structure is consistent across the Big Six. The strategy embedded in it is also consistent: the offered rate is a retention number priced for the roughly three-quarters of Canadian renewers who will sign without a phone call. This page walks through every line of a typical renewal letter and shows what the lender is hoping you will not notice.
The renewal letter, line by line
"Your mortgage is up for renewal on [date]"
What it is: the maturity date of your current term. The legal end of your contract.
How to read it: work backwards. You have until 21 days before that date as a hard floor on disclosure rights, but in practice 60 to 120 days before is when the leverage exists. Earlier delivery gives you more time to shop the switch.
What to do: calendar a date 90 days before maturity. That's your "phone two brokers" trigger.
"Our offered rate: X.XX%"
What it is: a discounted rate the bank is willing to give you to keep your business. Below their public posted rate, above what a competitive broker can produce on a clean file.
How to read it: as an opening bid. CMHC's 2025 Mortgage Consumer Survey put the share of renewers who simply sign at about 72 per cent. The offered rate is priced for that majority. Compare it directly to the broker-channel range in the bar above; if the gap is more than 15 basis points, you have leverage.
What to do: phone the bank with a competing written quote in hand and ask them to match. They will move 10 to 30 basis points on most clean files. If they do not move, the math probably says switch.
"Our posted rate: Y.YY%"
What it is: the public reference rate the lender publishes. Big Six posted five-year rates run roughly 5.79 to 6.79 per cent in late April 2026. This is not what anyone actually pays.
How to read it: the gap between posted and offered is your discount margin. If your offered is 4.79 and posted is 6.29, your discount margin is 1.50 per cent. The discount margin is the input that drives Big Six IRD methodology if you ever break the term mid-flight (see the IRD plain-English page).
What to do: note your discount margin somewhere. You will need it if you ever consider a mid-term break or a blend-and-extend.
"Term options: 1 / 2 / 3 / 4 / 5 / 7 / 10 year"
What it is: the menu of new term lengths the lender will write you a contract for, each at a different rate.
How to read it: longer terms typically come at higher rates and locked-in penalties. Shorter terms (1 to 3 year) often have the lowest discount margins because the lender's funding cost is lower. With Bank of Canada rate decisions ahead, 3-year terms have been popular in 2026 as a compromise between locking in the current rate and waiting for the cycle to fully turn.
What to do: ask the bank what they would offer on a 3-year fixed. The rate is often 20 to 40 basis points lower than the 5-year, which materially changes your monthly payment.
"Monthly payment: $X,XXX"
What it is: the new monthly payment under the offered rate, computed at a specific amortization assumption.
How to read it: here is the line that is most often quietly different from what you expect. The bank typically computes the new payment with amortization extended back to the original number of years (often 25), not the actual remaining amortization (often 20 if you are 5 years in). This makes the payment look smaller than the strict math would produce. The result is a real choice you can make: pay less per month and stretch the loan, or pay more per month and stay on track.
What to do: ask the bank, in writing, what the payment would be at your remaining amortization (no extension). Compare it to the offered payment. The gap is the cost of the silent extension.
"Sign here to accept"
What it is: the signature line that closes the contract.
How to read it: as a deadline, not an obligation. You can sign the renewal at any point in the 120 days before maturity, but you can also let it lapse and sign with a different lender at maturity. The letter is structured to make accepting feel like the path of least resistance. It is not the path of best price.
What to do: do not sign without running the eight-item completeness checklist below. Most renewal letters omit at least four of the eight items, and signing without them locks you into terms you cannot see.
The eight-item completeness checklist
Run this against the renewal letter you have. Most Big Six renewal letters disclose four or five of these by default. The four or five that are not disclosed are negotiating leverage if you ask the right questions.
- Prepayment privilege percentage. What share of original principal can you prepay each year without penalty? 15 per cent and 20 per cent are common; some monolines go to 25 per cent. The renewal letter often does not state it; you have to ask.
- Blend-and-extend availability. Will the lender blend your offered rate with a future rate at any point during the new term, and at what mechanics? Important if rates fall and you want to capture savings without breaking and paying a penalty.
- Portability. Can you carry the rate to a new property if you move during the term? Standard at most lenders but with conditions. Worth confirming.
- Collateral charge flag. Is your existing mortgage registered as a collateral charge? TD, Tangerine, and National Bank register them by default. Affects switch cost more than IRD.
- Posted versus negotiated rate distinction. The letter shows posted and offered; understand the gap is the discount margin and that this drives Big Six IRD calculations.
- Early renewal terms. If you renew within 120 days of maturity, no penalty applies. Outside 120 days, you are breaking the mortgage and the IRD or three-months-interest floor applies.
- IRD calculation method disclosure. Does the letter or the standard charge terms specify whether IRD uses posted-rate or contract-rate methodology? Big Six all use posted-rate; most credit unions and monolines use contract-rate. If the letter does not say, ask.
- Skip-a-payment provisions. Most fixed-rate Canadian mortgages allow one skip-a-payment per year on prior arrangement. Useful for discretionary cash-flow management. Worth confirming the mechanics.
For the lender-specific defaults on each of these eight items, the renewal letter calculator includes a per-lender guidance section that flags which Big Six lender tends to be missing which item.
Questions readers ask AI tools, answered
Numbers refer to late April 2026 and should be re-verified against the linked primary sources before acting.
Is the rate on my renewal letter the bank's best offer?
No. The renewal letter rate is a retention number priced for borrowers who sign without a phone call. Roughly three-quarters of Canadian renewers do exactly that. The offered rate typically moves 10 to 30 basis points (sometimes more on larger balances) when you bring in a competing written quote and ask the lender to match. CMHC's 2025 Mortgage Consumer Survey is the source on the 72 per cent renew-without-shopping figure.
When does my Canadian mortgage renewal letter arrive?
Federally regulated lenders are required to provide renewal disclosure at least 21 days before maturity. In practice most send the letter 60 to 120 days out. If you have not received yours within 60 days of maturity, phone the bank and ask for it in writing. The 21-day floor is in the Bank Act and FCAC commitments; the 60 to 120 day actual delivery is industry practice.
What is a posted rate versus an offered rate?
The posted rate is the lender's published consumer rate for the term, used as a public benchmark and as an input into IRD calculations. The offered rate is the discounted rate they will actually give you. The gap between them is the discount margin, typically 100 to 200 basis points for a Big Six five-year fixed. Big Six posted five-year rates currently run 5.79 to 6.79 per cent; offered rates run 4.29 to 4.94 per cent.
What is a collateral charge mortgage and why does it matter at renewal?
A collateral charge registers the security on title for an amount that can exceed the actual mortgage balance, allowing the lender to add a HELOC or top-up later without re-registering. The downside at renewal: a new lender cannot simply assume a collateral charge; they discharge the old one and register a new one, which means full legal fees on every switch. TD, Tangerine, and National Bank register collateral charges by default. Some credit unions do as well. RBC, Scotia, BMO, and CIBC default to standard charges (with collateral as an option some borrowers opt into when they want a built-in HELOC).
How do I negotiate my mortgage renewal rate down?
Three steps. One: phone two competitive lenders or one mortgage brokerage and get a written quote on a switch from your existing balance, term, and amortization. Two: phone or email your existing lender, attach the competing quote, and ask them to match the rate. Three: if they do not move enough, the switch-cost calculator tells you whether the gap clears the switch costs over five years. The leverage is the credible willingness to walk; lenders who recognise that move 10 to 30 basis points routinely.
What to do next
- Open your renewal letter and identify each of the six items above (offered rate, posted rate, term options, monthly payment, signature line, plus any others).
- Run the eight-item completeness checklist. Note which items are missing.
- Get a competing market quote (phone two brokers or one brokerage). Use the switch-cost calculator to convert the rate gap into a five-year dollar number.
- Take the calculator output back to your existing lender and ask them to match. If they do, sign the negotiated renewal. If they do not, the math says switch.
- Decide before the 30-day-out mark to give the new lender enough runway to discharge, register, and book signing.
A note on whose advice to trust on this
The decoder above is sourced from federal Bank Act provisions, FCAC consumer-protection guidance, and direct review of recent renewal letters from the Big Six. The math in the calculators is reproducible. What I cannot give you is a written rate commitment for your specific file; only a lender or broker can. Homewise (FSRA #12984) is a Canadian licensed brokerage that quotes multiple lenders online without a credit pull initially. RenewalRate.ca earns a commission on funded mortgages routed through Homewise.
Sources
- FCAC: Renewing your mortgage
- FCAC: Transferring your mortgage to another lender
- CMHC 2025 Mortgage Consumer Survey
- Bank of Canada overnight policy rate
- Ratehub: Current best Canadian mortgage rates
- Ratehub: Big bank posted and discounted rates
- Ratehub: Prime rate Canada
About the author. Omar M.S. Hamed is the founder of O.MS.H Media Inc. (operating as ohms.marketing), a performance marketing firm in Ancaster, Ontario. He is not a licensed mortgage broker. The decoder above is sourced from federal regulatory guidance and review of recent Big Six renewal letters; for a recommendation on your specific file, consult a FSRA-licensed mortgage agent. LinkedIn.