In short
When the term ends, you renew with your lender or move to another one. The amortization carries on.
Renewal is your best chance to save, so compare offers instead of signing the first letter.
How mortgage terms work in Ontario
Your term is the length of your current mortgage contract: the rate, the payment and the conditions. Terms in Canada typically run from 6 months to 10 years, and the 5-year term is the most common.
When the term ends, any remaining balance has to be renewed, refinanced or paid off. Your amortization, the full payoff schedule, carries on across terms.
Shorter terms let you reset sooner if rates fall, while longer terms give you more years of payment certainty. Rates differ by term, so compare the full cost, not just the headline number.
What happens at renewal?
Federally regulated lenders must send you a renewal statement at least 21 days before your term ends. If they plan to renew you automatically, the statement has to say so.
Don't wait for that letter. Start comparing offers a few months before your term ends. You can renew with your current lender, negotiate, or move to a new lender.
Since November 21, 2024, a borrower with an uninsured mortgage who switches to another federally regulated lender at renewal, without increasing the loan amount or the amortization, doesn't have to qualify at the stress test rate. Insured mortgages switching at renewal are generally exempt as well. The new lender still has to approve you.
Shopping around is worth the effort. Even a small rate difference on a large balance adds up over a five-year term.
Breaking a term early
Leaving before the term ends, for example to sell or refinance, usually costs a prepayment penalty. It is typically the higher of three months' interest or the interest rate differential, and fixed-rate penalties can be much larger.
Terms longer than five years have a federal safeguard: for individual borrowers, after five years the mortgage can be paid off with a penalty of no more than three months' interest.
Before you sign, read the prepayment section of your agreement. Federally regulated lenders must explain how they calculate penalties, and you can ask for the exact figure at any time.
Common questions about mortgage term
How long is a typical mortgage term in Canada?
The most common term is 5 years, though terms usually range from 6 months to 10 years. Shorter terms let you reset sooner, while longer terms lock in your rate and payment for more years. Compare the penalty to break each option, not just the rate.
Do I have to pass the stress test again when I renew?
No, not if you renew with your current lender or do a straight switch to another lender. Since November 21, 2024, uninsured straight switches no longer need to pass the stress test. If you add money or extend your amortization, it becomes a refinance and you will be stress tested.
When will my lender send my renewal offer?
Federally regulated lenders must send a renewal statement at least 21 days before your term ends. That is a minimum, so many borrowers start shopping a few months earlier. The statement must tell you if the lender plans to renew you automatically.
Can I switch lenders at the end of my term?
Yes, you can move your mortgage to another lender at renewal without a prepayment penalty. The new lender will review your application, and there may be legal or discharge fees. Ask whether the new lender covers any switching costs. Switching is easiest at renewal.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.