Canada Simplifies Mortgage Borrower Lender Switching, Reports Reuters

Canada’s banking regulator announced on Wednesday that it will facilitate the process for borrowers looking to switch banks when renewing their mortgages by removing a rule that has faced significant opposition from industry participants.

Typically, Canadian mortgages have terms of five years or shorter, unlike the United States, where 30-year terms are common. It’s a frequent practice for borrowers to change lenders in search of better interest rates without altering the loan amount or repayment schedule, known as a straight switch.

Starting November 21, borrowers will no longer be required to demonstrate that their income meets the Minimum Qualifying Rate when opting for a straight switch.

This adjustment will expand the options available to borrowers, particularly those who are facing renewals at interest rates that exceed those seen during the lower rate periods of previous years.