What happens when a fixed term ends?
A fixed term ending is not the mortgage ending, unless the balance is about to hit zero. The rate contract expires. The remaining balance is still owed. You pick a new term with the same lender, move the balance to another lender, or pay it out.
If you do nothing, lenders roll the balance into a renewal they choose, often a posted or non-discounted rate. That is the expensive version of "I forgot." The letter arrives months ahead so this does not happen by accident. Open it.
The three doors
| Choice | What changes | Stress test |
|---|---|---|
| Renew with the same lender | New rate and term. Balance stays. Prepayment privileges may reset to the new product | Usually not, on a straight renewal |
| Switch lenders, same balance, same amortization | New rate. A discharge fee and possibly an assignment | Uninsured straight switches have not required the minimum qualifying rate since November 21, 2024 |
| Refinance | New money, a longer amortization, or both | Yes. It is a new loan |
The rate you are offered on that day is a market rate, not a right to the rate you had. Someone leaving a 5.5% fixed, which is what one southern Ontario renewal in the thread was coming off, can still be offered a number in the mid 4s and be better off. Someone leaving a pandemic-era rate will pay more. Both can be true in the same month.
Ask for the penalty only if you are leaving before the end date. At the end date the fixed term is over and the interest-rate differential does not apply. A discharge or assignment fee still can. Title insurance and a small legal bill show up on some switches and not on a same-lender renewal. Put those dollars next to the payment gap before you move for 10 basis points.
Variable offers in a renewal menu move if prime moves between the letter and the day you sign. Fixed offers in the same menu move when the lender replaces the sheet. After October 28, ask for a fresh letter. The timing guide is when to shop a renewal. When you have the letter, request cheaper rates.