Short answer
Not always. A switch at maturity may avoid an early-payment penalty, but appraisal, legal, registration, assignment, discharge and setup costs can remain. Some lenders cover selected costs, subject to conditions.
The client concern behind the question
A homeowner sees a lower renewal rate elsewhere but abandons the switch after hearing about legal work, or switches without checking whether fees erase the savings.
What the verified rule or guidance says
FCAC lists potential switching costs, including discharge, setup, assignment, appraisal and administration fees. Cost coverage is an individual lender offer, not a regulatory entitlement.
What it does not guarantee
A “free switch” may exclude collateral charges, multiple secured accounts, private mortgages, title problems or a requested increase. Cashback or fee reimbursement can have clawback conditions. The lowest rate may also carry restrictive prepayment or portability terms.
A practical Ontario example
Illustration only: A new lender offers to pay standard transfer costs but not the appraisal or discharge of a collateral HELOC. The client still saves over the term, but only after those costs and the product’s future break penalty are included.
Practical steps to consider
Request one net comparison showing all costs, payment, interest, privileges and likely exit penalty. Track the renewal early at the complimentary Track My Mortgage service so there is time to negotiate with the current lender or complete an outside switch.
Questions to ask before deciding
- Which statement is law or regulator guidance, and which part is the lender’s own policy?
- What are the complete costs today, at renewal and at the expected exit?
- What documents, dates or property facts could change the answer?
- Would an A, alternative/B, MIC or private lender view the verified file differently?
- What is the backup plan if the preferred route is declined or delayed?
Rajiv’s broker perspective
A useful answer must solve the client’s real concern, not repeat a definition. I would verify the documents and timeline, separate regulator requirements from lender policy, then compare the available routes in dollars. A conventional A lender may offer the lowest cost when the file fits. An alternative/B lender may use a broader income or credit approach. A MIC or private mortgage may provide short-term flexibility, but fees, interest, term and the exit must be clear. The right recommendation is the one the client can carry and exit safely.
Related: Mortgage declined? Start here · Mortgage Knowledge Centre · Updates & Rules Centre
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