When your mortgage renews, you are free to switch to any lender you want. The key question is whether the new lender puts you through the mortgage stress test again.
The answer depends on the type of switch. If you make a straight switch, same balance and same amortization, you do not have to pass the stress test as of November 2024. If you add money or extend your amortization, the stress test applies.
Pekoe is a licensed brokerage, FSRA Licence #13321 in Ontario and RECA licensed in Alberta. We handle these switches every renewal season.
What Is the Mortgage Stress Test?
The mortgage stress test is a qualification rule that requires you to prove you can afford your mortgage at a rate higher than your actual contract rate. The test rate is the Minimum Qualifying Rate (MQR), and it exists so borrowers can handle rate increases.
You qualify on the higher test rate, not your real rate. The lender does not charge you the test rate, they just confirm you could carry it. Until November 2024, this test also applied when you switched lenders at renewal.
Do You Requalify When You Switch Lenders at Renewal?
Yes, the new lender assesses your income, credit, and property. What changed is the stress test itself. As of November 2024, OSFI removed the stress test for straight switches of uninsured mortgages, meaning you keep the same balance and amortization.
The new lender will still pull your credit, verify your income, and value your property. They are confirming you remain creditworthy and that the home secures the loan. They are simply no longer making you qualify at the higher test rate, so you qualify at your contract rate instead.
Straight Switch vs Adding Money
This distinction is the whole ballgame. The table shows how each change is treated.
| Type of Change at Renewal | Treated as | Stress Test Applies? |
|---|---|---|
| Same balance, same amortization, new lender | Straight switch | No (as of November 2024) |
| Increase the loan amount (adding money) | Refinance | Yes |
| Extend the amortization | Refinance | Yes |
| Renewing with your current lender | Renewal | No |
When you add money, you are borrowing new funds, which triggers full qualification under the stress test. Extending your amortization counts as new borrowing too, so it also requires the test. A simple lender switch with no balance change is a straight switch and does not.
You can read more about the mechanics in our guide to switching lenders at renewal.
What the New Lender Checks
Even without the stress test, the new lender runs a full assessment. They review your income, employment history, and credit report. They also value the property to confirm it still supports the mortgage.
If your income has dropped sharply, a new credit problem has appeared, or your property value has fallen, the lender could still decline the switch. Most straight switches are approved quickly, because the lender is confirming that nothing material has changed. You are not borrowing new money, so the underwriting is lighter than a purchase or a refinance.
How to Make a Switch Go Smoothly
Start with a broker or lender 4 to 6 months before your maturity date. Leaving it to the last month costs you negotiating power and time to close before your rate locks in. A broker handles the paperwork, coordinates between lenders, and arranges the discharge and re-registration.
You will provide recent pay stubs, two years of tax returns, and proof of any other income. Once the appraisal and credit check are done, the lender issues an approval and the switch closes. The process typically takes a few weeks from application to funding.
A straight switch can save you thousands in interest over the next term, since even small rate gaps compound. It is also worth negotiating hard first, and our guide on how to negotiate your renewal rate walks through that.
Frequently Asked Questions
Do I need to pass the stress test to switch lenders at renewal?
Not for a straight switch, where you keep the same balance and amortization, as of November 2024. The new lender still checks your credit and income, but does not make you qualify at the higher test rate. If you add money or extend your amortization, the stress test applies.
What is a straight switch?
A straight switch moves your mortgage from one lender to another without changing the loan amount or the amortization. The new lender pays off the old mortgage and registers a new one. It is the simplest type of renewal change.
Does adding money to my mortgage change the rules?
Yes. Adding money at renewal is a refinance, which triggers the full stress test at the higher qualifying rate. Extending your amortization does the same, so discuss any such change with your broker in advance.
Will I be turned down if my income dropped?
It depends on how far your income fell and whether the drop looks temporary or permanent. If your income is stable at a lower level, you may still qualify, but a volatile or declining trend can lead to a decline. A broker can often present mitigating factors to a lender on your behalf.
When should I start the switch?
Start with a broker or lender 4 to 6 months before your maturity date. That gives you time to shop rates, get an approval, and close without pressure. Much earlier than that and a locked rate may expire before your renewal.
Switching Lenders at Renewal: Get Expert Help
The rules changed recently, so getting them right matters. You do not need to pass the stress test for a straight switch at renewal, but you still requalify with the new lender, and adding money or changing your amortization brings the test back.
A broker can tell you which type of switch applies to you and shop the market on your behalf. Check today’s live rates at pekoe.ca/rates, updated daily. You can also get a pre-approval certificate in seconds.
If you are renewing soon, the Renewal Negotiation Playbook walks you through the whole process, including when to switch, how to negotiate, and how to time your move.
Contact Pekoe.ca to discuss your renewal strategy.