Mortgage Renewal

Federally regulated lenders in Canada are required by federal law to send a renewal statement to the borrower at least 21 days before the end of the mortgage term. Many lenders in BC send renewal offers 30 to 120 days in advance as a practical measure to give borrowers time to compare options. The Financial Consumer Agency of Canada (FCAC) provides guidance on what information must be included in a renewal statement.

When a borrower renews a mortgage with their existing federally regulated lender in BC, the renewal generally does not require requalification under the federal mortgage stress test. However, if the borrower switches to a different federally regulated lender at renewal time, a new mortgage application is required and the stress test applies to the new loan. Borrowers should confirm the applicable rules with their lender or a licensed mortgage broker, as lender policies and federal regulations can change.

BC real estate licensees are regulated by the British Columbia Financial Services Authority (BCFSA) under the Real Estate Services Act (RESA) and its Rules, and their authorized scope of practice is limited to real estate services as defined in RESA. Providing mortgage renewal advice or acting as a mortgage broker requires a separate licence under the Mortgage Brokers Act. A licensee who discusses mortgage renewal as general educational information is not providing regulated mortgage services, but any remuneration or referral arrangement must comply with RESA Rules.

A lender refinancing or renewing a mortgage on a strata lot in BC may require documents such as a Form B Information Certificate, which is issued under the Strata Property Act (SBC 1998, c. 43) and discloses the strata corporation's financial status, bylaws, and any amounts owing by the unit owner. Lenders may also request a copy of the current depreciation report or contingency reserve fund balance to assess the financial health of the strata corporation. The strata corporation is required to provide a Form B within a prescribed period upon request and payment of any applicable fee.

A mortgage renewal, whether with the same lender or a different lender, does not constitute a taxable transaction under the BC Property Transfer Tax Act, because no transfer of land is occurring. Property Transfer Tax is triggered by a transfer of a registered interest in land, not by changes to financing arrangements on a property already owned. Borrowers do not need to file a Property Transfer Tax return solely as a result of a mortgage renewal.

When a property owner in BC dies, their estate is administered according to the Wills, Estates and Succession Act (WESA), and the mortgage obligation forms part of the estate's liabilities. The executor or administrator of the estate is responsible for managing the property and its associated mortgage, which may include negotiating a renewal if the term expires during the administration period. The lender's ability to require renewal or demand repayment will depend on the mortgage contract terms, and the executor should seek independent legal advice on the estate's obligations.

If a borrower in BC fails to repay or renew the outstanding mortgage balance at the end of the term, the lender may commence foreclosure proceedings through the BC Supreme Court. Foreclosure in BC is a judicial process governed by the BC Supreme Court Civil Rules and the Law and Equity Act; BC does not use a power-of-sale process as some other provinces do. The court has discretion to grant an order nisi and a redemption period during which the borrower may repay the debt.

If a federally regulated lender or a BC mortgage broker sends unsolicited commercial electronic messages about renewal offers, those messages must comply with Canada's Anti-Spam Legislation (CASL), which requires express or implied consent, sender identification, and an unsubscribe mechanism. The collection and use of the borrower's personal information in connection with the renewal process must also comply with BC's Personal Information Protection Act (PIPA), which governs how private-sector organizations in BC collect, use, and disclose personal information. Borrowers have the right under PIPA to request access to their personal information held by a BC-regulated organization.

No, a borrower in BC is not legally obligated to accept the renewal offer from their existing lender and may shop for better terms with other lenders or through a licensed mortgage broker. The Financial Consumer Agency of Canada (FCAC) specifically encourages borrowers to compare renewal offers, as doing so can result in more favourable interest rates or terms. Switching to a new federally regulated lender will, however, require a full mortgage application and qualification under the federal stress test.

A mortgage renewal itself does not change the ALR status of land governed by the Agricultural Land Commission Act (SBC 2002, c. 36), and the land remains subject to all ALR use restrictions regardless of changes in financing. However, a lender renewing a mortgage on ALR land should be aware that the Agricultural Land Commission (ALC) restricts non-farm use, subdivision, and certain construction activities, which can affect the land's value and marketability as security. Borrowers and lenders with questions about permitted uses or restrictions on a specific ALR parcel should consult the ALC directly.