Canada’s Banking Regulator Eases Mortgage Switching Rules

(Reuters) – Canada’s banking regulator announced on Wednesday that it will simplify the process for borrowers to switch banks when renewing their mortgages by removing a long-criticized rule.

Most mortgages in Canada have terms of five years or less, unlike the 30-year term commonly found in the United States.

Switching lenders for better interest rates, without altering the loan amount or repayment schedule—a process known as a straight switch—is a typical practice.

Starting November 21, borrowers will no longer need to demonstrate that their income meets the Minimum Qualifying Rate when pursuing a straight switch.

This change will expand lender options for borrowers facing renewal at higher interest rates compared to those seen during the recent lower interest rate period.