December 1, 2025
With many Canadian and Alberta homeowners renewing in 2026 at rates still hovering above 5%, switching lenders is becoming one of the most effective ways to reduce monthly payments. While big banks often rely on “auto-renewal” offers that most clients accept without shopping around, several non-bank lenders and credit unions are now pricing renewals more competitively to win new business. That means borrowers with healthy equity and good credit may save far more by transferring their mortgage than by staying put.
Switching is much easier than most homeowners realize. In most cases, the new lender covers standard legal and administrative costs, making the transition nearly cost-free. A switch also lets you access features your current lender may not offer—better prepayment options, lower penalties, or a more flexible term. For borrowers facing renewal payment shock, even a small rate improvement can translate into meaningful monthly savings, especially on remaining balances between $300,000 and $600,000.
However, switching still requires a full approval, which means updated income documents, credit checks, and property verification. Because of 2025–2026’s tighter underwriting standards, borrowers with upcoming changes—variable income, new debts, or reduced work hours—should start preparing early. Keeping your credit stable, avoiding new loans, and maintaining clean banking history will position you for a stronger approval at renewal.
For many homeowners, 2026 offers something rare: strong home equity combined with stable (but elevated) interest rates. This balance gives borrowers leverage to shop around and negotiate, rather than accepting the first renewal offer they receive. Before locking into a new term, compare at least two lender options and ask your broker to run updated numbers. With the right strategy, switching lenders could turn 2026 from a challenging renewal year into one of the most financially rewarding decisions you make.
Source: Absolute Mortgage Team