Renewing Your Mortgage in 2027? Why GTA Homeowners Should Start Now

If your mortgage term ends in 2027, the best time to start planning is now, not when the renewal letter arrives. The Bank of Canada raised its policy rate to 2.50% on October 28, 2026; the major banks moved prime to 4.70% and the Bank has said more increases are possible. This post explains why starting early matters, what your options are and the simple steps GTA homeowners can take over the next few months.

Why 2027 renewals need attention now

After holding its rate at 2.25% for a full year, the Bank of Canada raised it to 2.50% on October 28. In its October Monetary Policy Report, the Bank said it expects inflation to rise to about 3.5% by the end of 2026 and stay around 3% through much of 2027 before returning to its 2% target by mid-2028. It also said there could be a need to raise the rate further, while proceeding carefully. The next decision is December 9, 2026.

No one can say exactly where rates will be when your term ends. That uncertainty is the reason to prepare early. Homeowners who plan ahead have choices. Homeowners who wait for the letter often end up signing whatever is offered because the deadline is close.

What the rules actually say about renewal

According to the Financial Consumer Agency of Canada, a federally regulated lender such as a bank must send you a renewal statement at least 21 days before the end of your term. The statement shows your balance, interest rate, payment frequency, term and any fees. If your lender does not plan to renew your mortgage, it must also tell you at least 21 days before the term ends.

Two details surprise many homeowners:

• Renewal can be automatic. If you do nothing, your mortgage may renew automatically, and not always at the best available rate. Your renewal statement will say if your lender plans to do this.
• The letter is negotiable. You may be able to get a lower rate than the one in your letter, especially if you can show a competing offer.

The agency's own advice is to start shopping a few months before your term ends and not to wait for the renewal letter.

Switching lenders is easier than it used to be

Until late 2024, many homeowners with uninsured mortgages felt stuck with their current lender, because switching meant passing the mortgage stress test again. That changed on November 21, 2024. Borrowers who make a straight switch to a new federally regulated lender at renewal now qualify at their contract rate instead of the higher qualifying rate. The exemption was later extended to insurable mortgages as well. Insured mortgages were already exempt.

The key condition is that it must be a straight switch: the same mortgage amount and the same amortization. If you want to borrow more or stretch your amortization, normal qualification rules apply. The new lender also still reviews your application, so your income and credit still matter.

Switching can involve costs such as discharge, registration, appraisal or legal fees. Some lenders will cover part or all of these to win your business, so it is worth asking. If your mortgage is registered as a collateral charge, plan for extra time, because other loans secured by that charge may need to be paid off or moved too.

What a small rate difference can cost

Shopping around matters because small differences add up. As an illustration only, on a $500,000 balance with 20 years left on the amortization, a renewal rate of 4.50% instead of 4.00% means roughly $131 more each month. Over a five-year term, that is close to $7,850 in extra payments. Your own numbers will depend on your balance, rate, term and lender, so treat this as a reason to compare offers, not a forecast.

Your renewal plan, step by step

1. Find your exact renewal date. Check your latest mortgage statement or online banking. Note your balance, current rate, remaining amortization and whether the mortgage is registered as a standard or collateral charge.
2. Set a planning timeline. Mark your calendar for about six months before your term ends to start reviewing, and about four months before to start collecting offers.
3. Stress-test your own budget. Work out what your payment would be at a rate 0.50% to 1.00% higher than today's offers. If that would be tight, plan for it now.
4. Ask your lender about early renewal. Many lenders let you renew within a set window before maturity without a penalty. Ask how early you can renew and whether a rate hold is available.
5. Get at least one competing quote. Talk to another lender or a mortgage broker. Keep written offers, because your current lender may ask for proof before matching.
6. Decide on term and rate type. Compare fixed and variable options and term lengths with your lender or broker, based on your budget and plans, not only today's headlines.
7. Read the fine print before signing. Check prepayment privileges, penalties for breaking the term and portability, especially if you might move or downsize during the next term.

When renewal is the right time to rethink your home

Renewal is one of the few moments when you can change your plans without a penalty for breaking your term. If you have been thinking about selling, buying something larger or downsizing, it makes sense to look at both decisions together:

• Planning to sell in the next few years? A shorter term or a portable mortgage may give you more flexibility. A free home value review shows what your equity looks like today.
• Thinking about downsizing? Selling near your renewal date can mean a simpler exit. My senior downsizing page walks through the process.
• Need more space? Read about upsizing your home in the GTA before you lock in a long term.
• Own rental property? Map out every renewal date and re-run cash flow at today's rates.

For more on what the October rate increase means for buyers, sellers and investors, read Bank of Canada Raises Rates to 2.50%: What It Means for GTA Homeowners, Buyers and Investors.

The bottom line

A 2027 renewal can feel far away, but the homeowners with the most options are the ones who start early. Know your date, run your numbers, ask about early renewal and compare at least one other offer. Most importantly, decide whether your home still fits your plans before you commit to another term.

Frequently Asked Questions About Mortgage Renewal

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Tarlika Sehgal, REALTOR®, SRS®, ABR® | eXp Realty Of Canada, Inc., Brokerage

This article is for general information only and is not mortgage, financial, legal or tax advice. Payment examples are illustrations, not lender quotes. Lender policies, rates and regulations change. Please speak with your lender or mortgage professional, lawyer or accountant about your own situation.