A mortgage transfer allows homeowners to move their existing mortgage to a new lender at the end of their term without breaking the mortgage early. In Ontario, mortgage transfers are commonly considered at renewal and can provide an opportunity to review terms, rates, and flexibility without starting from scratch.
Mortgage transfers are often confused with refinancing, but the two work differently. Understanding how a transfer works can help homeowners decide whether staying put or moving to a new lender makes sense at renewal.
What Is a Mortgage Transfer?
A mortgage transfer, sometimes called a switch, occurs when a homeowner moves their mortgage from one lender to another at renewal while keeping the same mortgage balance and amortization.
Because the mortgage is transferred at the end of the term, there are typically no prepayment penalties. In many cases, income documents and a full requalification may not be required, depending on the lender and the homeowner’s situation.
How Mortgage Transfers Work at Renewal
Mortgage transfers usually take place during the renewal window, often up to 120 days before the mortgage maturity date. This timing allows homeowners to explore options without pressure.
Homeowners in Ontario, including Vaughan, Markham, Richmond Hill, and Newmarket, often consider a transfer when their current lender’s renewal offer does not align with their goals. The new lender coordinates the transfer process, including paying out the existing mortgage and registering the new one.
Mortgage Transfer vs Refinancing
Mortgage transfers and refinancing serve different purposes.
Mortgage Transfers
A mortgage transfer keeps the existing mortgage balance the same. It is typically used when homeowners want to change lenders or adjust mortgage features without accessing additional funds.
Refinancing
Refinancing changes the mortgage structure and may increase the loan amount, extend the amortization, or allow access to home equity. Refinancing usually requires full requalification and may involve additional costs.
Understanding the difference helps homeowners choose the option that best fits their needs at renewal.
H2: Why Homeowners Consider a Mortgage Transfer
Homeowners may explore a mortgage transfer for several reasons, including reviewing mortgage features, improving flexibility, or aligning their mortgage with current financial priorities.
While interest rates are often part of the discussion, mortgage transfers are also about contract terms such as prepayment privileges, portability, and future options. Using tools like a mortgage calculator can help estimate how changes may affect monthly payments.
When a Mortgage Transfer Makes Sense
A mortgage transfer may be suitable when a homeowner is satisfied with their mortgage balance and amortization but wants a different lender relationship or contract structure.
Homeowners who are early in their ownership journey may also find value in reviewing educational resources designed for first-time buyers to better understand how renewal and transfer decisions evolve over time.
For a broader overview of renewal decisions, this page works alongside your main mortgage renewal guide, which explains the full renewal process in detail.
Common Mortgage Transfer Considerations
Although mortgage transfers are often straightforward, homeowners should still review details carefully. Some lenders cover legal and transfer costs, while others may not. Timelines, documentation requirements, and eligibility can vary.
Information from the Canada Mortgage and Housing Corporation (CMHC) explains how mortgage terms and conditions affect long-term affordability. Guidance from the Government of Canada also emphasizes understanding mortgage contracts before committing to a new lender. Broader rate trends are influenced by policy decisions from the Bank of Canada, which can affect how lenders price mortgage options.
If you are considering a mortgage transfer at renewal, speaking with an SMM Mortgage advisor can help you review your options clearly and decide whether switching lenders aligns with your goals.
Frequently Asked Questions
What is a mortgage transfer?
A mortgage transfer is the process of moving your mortgage to a new lender at renewal without changing the mortgage balance.
Is a mortgage transfer the same as refinancing?
No. A transfer keeps the same mortgage amount, while refinancing changes the loan structure or balance.
Are there penalties for a mortgage transfer?
Transfers at renewal typically do not involve prepayment penalties.
When should I start planning a mortgage transfer?
Most homeowners begin reviewing transfer options up to 120 days before their mortgage maturity date.
Do I need to requalify for a mortgage transfer?
Requalification may not be required, but it depends on the lender and individual circumstances.