For years the single biggest reason people signed their renewal letter without shopping it was not laziness. It was that they couldn’t shop it. If your income had dipped, if you’d gone self-employed, if rates had climbed since you last qualified — moving to a different lender meant passing the stress test all over again at a higher bar, and plenty of people simply couldn’t. Their existing lender knew that, and priced the renewal offer accordingly.
That’s changed, and it changed in your favour. If you’re renewing this year, it’s the most useful thing to understand before you reply to the letter.
What actually changed
Two adjustments, arriving about a year apart, ended up covering nearly everybody.
Insured mortgages first. If you bought with less than 20% down, your mortgage is insured, and borrowers in that position were freed from requalifying under the stress test when switching lenders at renewal from early 2024.
Then uninsured mortgages. The larger group waited longer. On 21 November 2024, OSFI removed the requirement to apply the Minimum Qualifying Rate to straight switches at renewal for uninsured mortgages (Ratehub). The regulator’s own reasoning was that it made no sense for a borrower to face a tougher test to move their mortgage than to stay put — the arrangement effectively locked people in with the one lender who had no competitive reason to sharpen their pencil.
The December 2024 Fall Economic Statement then confirmed the exemption reaches insurable mortgages too — 20% or more down, originated at a federally regulated institution, and within the value limits insurers apply to their low-ratio products.
The practical effect: for most people renewing in 2026, the stress test is no longer the thing standing between you and a better offer somewhere else.
The conditions, which matter
This is not a blanket exemption, and the boundaries are worth knowing precisely, because stepping over one puts you straight back into full qualification.
It applies to a straight switch. That means:
- the balance stays the same — you’re not borrowing an extra dollar
- the amortization stays the same — you’re not stretching the remaining term to lower the payment
- the mortgage originated at a federally regulated financial institution
Change any of those and it’s no longer a straight switch. It becomes a refinance, and a refinance requalifies you under the ordinary rules, stress test included.
You are still underwritten by the new lender. They will still look at your income, your credit and the property. What they won’t do is test you against a rate roughly two percentage points above the one you’re actually being offered.
Where this bites in practice
The people this helps most are exactly the people who needed it.
If you’re self-employed. Business-for-self income is where the stress test did the most damage at renewal, because the qualifying income on paper so often understates what the business really supports. A straight switch sidesteps the hardest part of that conversation. (More on how lenders read that income on the self-employed page.)
If your circumstances changed mid-term. A parental leave, a job change, a business that had a soft year, a new car loan. Under the old rules any of those could quietly disqualify you from moving, which meant accepting whatever your lender offered.
If you’re simply being offered a mediocre rate. This is most people. Lenders have historically reserved their best pricing for new business rather than renewals, and the renewal letter is an opening position, not a final one.
What it doesn’t cover
Being straight about the limits, because I’d rather you hear it here than at the underwriting stage:
- Taking equity out. Consolidating debt, funding a renovation, helping with a down payment — all refinances, all fully requalified. Worth doing, often, but do it knowingly. The refinance page covers the mechanics.
- Extending your amortization to bring the payment down. Same story: that’s a refinance.
- Private and non-federally-regulated lenders. If your current mortgage came from a credit union outside federal regulation, a mortgage investment corporation or a private lender, the exemption doesn’t apply. There may still be a good move available; it’s just a different conversation.
- The new lender’s own standards. The stress test going away is not the same as approval being automatic.
What to do with it
Start about six months out. Rate holds commonly run 90 to 120 days, and starting early means you can hold something and then keep looking. Starting late means taking whatever is in front of you.
Treat the letter as an opening offer. It is one. Your lender is not obliged to lead with their best number, and in most cases they don’t.
Decide early whether you want a switch or a refinance. They’re genuinely different products now, with different qualification. If you want equity out, the calculation changes and it’s better to know that at the start.
Ask what a switch actually costs. Frequently nothing — many lenders cover the legal and appraisal cost of a straight switch to win the business. That’s worth asking about explicitly rather than assuming.
The short version
The rule that kept people stuck with their existing lender at renewal has gone for most borrowers. Your mortgage is more mobile at maturity than it has been in years, and the only way that helps you is if you use it before you sign.
If your renewal is coming up in the next six months, send me the letter and the current balance and I’ll tell you within a day whether there’s a better option and what moving would involve. It costs nothing and there’s no credit check to have the conversation.
There’s a fuller walkthrough of the timeline on the mortgage renewal page, and more on what the letter leaves out in this piece.