Usually nothing. This is the part banks are happy for you not to know.

At the end of your term you are free to move your mortgage to another lender with no penalty. There is a discharge and transfer process with legal costs and often an appraisal — and on a straight switch, the new lender very commonly absorbs those to win your business. What you should expect to pay is the outgoing lender’s discharge fee, which in Ontario is typically a few hundred dollars.

Compare that to the cost of signing the renewal letter without shopping. On a $400,000 balance over a five-year term, a rate just 0.20% better is roughly $4,000 in your pocket. The paperwork takes an afternoon.

A switch moves your existing balance to a new lender on the same terms. Same amount, same or shorter amortization, no cash out. It is the simplest transaction in the business and it is usually free.

A refinance changes the mortgage itself — borrowing more against your equity, consolidating debt, or extending amortization. It costs more, requires full legal work, and is capped at 80% of your home’s value.

The distinction matters because people ask for the wrong one. If you only want a better rate, ask for a switch. If you want to clear $30,000 of credit card debt at 21% into your mortgage, that is a refinance — and often worth it, because the interest difference does the work.

Renewal letters arrive with a posted-adjacent rate and a signature line, because the lender knows most people sign. Industry-wide, the majority of borrowers renew with their existing lender without negotiating — and lenders price accordingly.

You have leverage the moment you have a competing offer in writing. Frequently the same bank improves its own number once it knows you are prepared to move. Either outcome wins: a better rate where you are, or a better rate somewhere else.

Start 120 days before your maturity date. That is the window where a lender will hold a rate for you — protection if rates rise, freedom to take the lower number if they fall. Waiting until the last two weeks removes every option you have.

I will tell you not to move when the math says so. Switching mid-term triggers a prepayment penalty — three months’ interest on a variable, or on a fixed the interest rate differential, which can run into five figures and rarely justifies itself.

You also have to re-qualify to switch, at the stress-tested rate. If your income has dropped, your credit has taken damage, or you have added significant debt since you last applied, staying with your current lender may genuinely be your best available option — no new approval required. Honest answer first, transaction second.