Mortgage Blog
Can You Switch Mortgage Lenders in Canada? Here's How to Save Thousands
June 19, 2025 | Posted by: Sarabjit Dhuna
When it comes to managing one of your biggest financial commitments — your mortgage — staying with the same lender for the entire term isn’t your only option. In fact, switching mortgage lenders in Canada is not only possible, it can sometimes save you thousands of dollars in interest and fees. But like any big financial decision, it’s important to understand the process, costs, and benefits.
Why Switch Mortgage Lenders?
Homeowners in Canada consider switching lenders for several reasons:
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Lower Interest Rates: The most common reason. A better rate can mean significant savings over time.
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Better Terms or Flexibility: New lenders might offer features like prepayment privileges or skip-a-payment options.
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Poor Service or Experience: Sometimes the relationship with your lender isn’t working, and a switch offers peace of mind.
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Refinancing Needs: If you're refinancing for renovations or debt consolidation, another lender might offer better terms.
When Can You Switch?
You can technically switch mortgage lenders at any time, but it’s most common (and cost-effective) to do so at the end of your mortgage term. This is when your mortgage is up for renewal and you’re not locked into penalties for breaking the term early.
If you want to switch mid-term, you’ll likely face a prepayment penalty, which could range from a few hundred to several thousand dollars depending on your lender, mortgage type, and remaining time in your term.
What Are the Costs of Switching?
Here are the potential costs involved in switching mortgage lenders in Canada:
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Discharge Fee: Charged by your current lender to remove the mortgage from your property title ($200–$400).
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New Appraisal: Your new lender may require an updated property appraisal (approx. $300–$500).
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Legal Fees: You may need a lawyer to register the new mortgage (can be $700–$1,000+).
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Prepayment Penalty: If switching mid-term, this could be a major cost. Always ask your current lender for a payout statement.
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Assignment Fee (in some cases): If switching to a new lender through an assumption or transfer.
Good news: some new lenders may offer cash-back promotions or help cover some of these fees to earn your business — especially at renewal time.
How to Switch Mortgage Lenders
Switching lenders isn't complicated, but it does involve a few steps:
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Compare Offers: Shop around or work with a mortgage broker to find the best rates and terms.
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Apply with the New Lender: You'll need to provide documentation — income proof, property info, credit score, etc.
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Get Approved: Once approved, the new lender will arrange to pay off your existing mortgage and register their mortgage.
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Close the Deal: A lawyer or notary will finalize the switch.
Should You Switch?
Before making a move, weigh the savings vs. the costs. Use online mortgage calculators or speak with a mortgage advisor to understand your break-even point. Sometimes staying with your current lender and negotiating a better rate is a more practical option.
Final Thoughts
Yes, you can switch mortgage lenders in Canada — and sometimes you should. Whether you’re chasing a lower rate, better service, or more flexible terms, exploring your options can lead to smarter financial outcomes. Just make sure you understand the timing, the potential costs, and the benefits of making a switch.
