Mortgage Switching Fees Canada

Direct answer: When switching mortgage lenders in Canada, possible costs include prepayment penalties, discharge fees, registration or assignment costs, legal or notary fees, appraisal fees, administration fees and cashback repayment. At maturity, the penalty may be $0, but discharge, registration, legal or appraisal costs can still matter.

Use the Mortgage Renewal Offer Analyzer Canada to enter each fee separately. If you prefer a guided conversation, use the Canadian Mortgage Renewal Analyzer GPT. The calculation approach is documented in the renewal validation report.

Switching fee checklist

Cost	When it may apply	Analyzer field
Prepayment penalty	Breaking a closed mortgage before maturity	Penalty
Discharge fee	Removing the old lender's mortgage charge	Discharge
Registration or transfer	Registering or assigning the new mortgage security	Registration or transfer
Legal or notary fee	Professional work to close the switch	Legal/notary
Appraisal fee	New lender requires a property valuation	Appraisal
Cashback repayment	Old incentive must be repaid when the term is broken	Cashback repayment

Worked example

Assume a $425,000 renewal balance, 20-year amortization, five-year term, monthly payments and semi-annual compounding. Offer A is the current lender at 4.89%. Offer B is a switch offer at 4.69% with $3,395 of net switching costs.

Result	Offer A	Offer B with fees
Rate	4.89%	4.69%
Scheduled payment	$2,767.60	$2,722.10
Interest during term	$94,728.13	$90,739.39
Net switching cost	$0	$3,395.00
Total term cost	$94,728.13	$94,134.39

Even after $3,395 of switching costs, Offer B is still $593.74 cheaper in this example. If the fee estimate were higher by more than that, the ranking could flip.

What to confirm in writing

• Final payout statement and whether the date changes the number.
• Whether the mortgage is open, closed, fixed, variable or collateral charge.
• Whether the new lender covers any legal, appraisal or transfer costs.
• Whether a straight switch changes qualification, amortization or loan amount.
• Whether any old cashback or incentive must be repaid.

Methodology and limitations

The worked example uses the usecos renewal engine and a manually entered net switching cost. The analyzer does not calculate lender penalties; it only includes the penalty amount you enter. It excludes title-specific legal issues, provincial land-title rules, lender underwriting, broker compensation, tax treatment and advice about whether switching is suitable. Verified July 30, 2026.

Sources: FCAC breaking your mortgage contract; FCAC discharging a mortgage; FCAC mortgage prepayment rights; OSFI straight-switch MQR exemption.