- RBC completed its acquisition of HSBC Canada's retail and commercial banking business on March 28, 2024.
- Existing HSBC mortgages were transferred to RBC, meaning RBC is now your lender for the remainder of your current term.
- At renewal, former HSBC clients will receive a mortgage renewal offer from RBC, typically 30–120 days before maturity.
- You are not obligated to accept RBC's renewal offer and can switch to another lender without penalty (unless breaking your current term early).
- The OSFI B-20 stress test exemption for uninsured mortgage renewals at a new federally regulated lender applies, simplifying switching.
If you held a mortgage with HSBC Canada, RBC is now your lender following its acquisition of HSBC's Canadian operations. At your mortgage renewal, you will receive an offer from RBC, as they have assumed responsibility for your existing mortgage agreement.
This transition means you now engage with RBC for all mortgage-related inquiries and will need to evaluate their renewal offer against the broader market to ensure you secure the most favourable terms available.
What happens to my current HSBC mortgage term and rate?
Your current HSBC mortgage term, interest rate, and payment schedule remain unchanged until your scheduled renewal date. RBC has taken over the servicing of your existing mortgage contract exactly as it was originally set up with HSBC.
This means there are no immediate changes to your monthly payments or the interest rate you are paying right now. You will continue to make payments to RBC according to your existing agreement. The terms of your mortgage, including amortization, payment frequency, and any specific features (like prepayment privileges), are honoured by RBC for the remainder of your current term. Any correspondence regarding your mortgage will now come from RBC.
When will I receive my mortgage renewal offer from RBC?
You can expect to receive your mortgage renewal offer from RBC approximately 30 to 120 days before your current mortgage term matures. This timeframe is standard practice for Canadian lenders, allowing you sufficient time to review the offer and explore other options.
RBC will typically send this offer via mail or through your online banking portal. It's crucial to pay close attention to this notice, as it marks the beginning of your decision-making window for your next mortgage term. Don't simply sign the first offer; this period is your opportunity to compare rates and terms.
Am I obligated to renew my mortgage with RBC?
No, you are not obligated to renew your mortgage with RBC, even though they are now your current lender. At renewal, you have the right to shop around and choose any lender that offers the best mortgage product and rate for your needs.
Many Canadians mistakenly believe they must stick with their current lender. However, renewal is a prime opportunity to leverage competition among lenders to secure better terms. You can switch to another bank, credit union, or even a different mortgage product (e.g., from fixed to variable) without incurring a penalty for breaking your current term, as long as you wait until your maturity date.
What are the advantages of switching lenders at renewal?
Switching lenders at renewal can offer several advantages, primarily the opportunity to secure a more competitive interest rate than what your current lender might offer. Other lenders often provide promotional rates or better terms to attract new clients.
Additionally, switching allows you to reassess your mortgage needs and find a lender whose products and services better align with your financial goals, whether that's different prepayment options, more flexible terms, or even access to better customer service. This competitive landscape is often why engaging with a mortgage agent is beneficial, as they can access rates from multiple lenders, including those RBC might not be willing to offer directly.
Will I have to pass the mortgage stress test to switch lenders?
For most uninsured mortgage renewals, you will not have to re-qualify under the OSFI B-20 stress test if you switch to a new federally regulated lender. This exemption, updated in November 2024, simplifies the process of moving your mortgage.
The exemption applies to borrowers who are renewing an existing mortgage and maintaining roughly the same loan amount. However, if you are increasing your mortgage amount, consolidating debt, or your mortgage is insured (e.g., by CMHC), you may still be subject to the stress test. Always confirm with your mortgage professional if your specific situation qualifies for this exemption.
Jay Klair — FSRA Level 2 mortgage agent — will personally review your offer for free. One business day reply.
How does RBC's renewal offer compare to other lenders?
RBC's renewal offer will be competitive, but it may not always be the absolute best rate available in the market, especially given the significant increase in their mortgage portfolio from the HSBC acquisition. Banks typically offer slightly higher rates to existing clients who don't actively negotiate or shop around.
To illustrate, consider a $500,000 mortgage balance with 20 years remaining on its amortization. If RBC offers a 5-year fixed rate of 5.14%, your monthly payment would be approximately $2,960. However, if another lender or a mortgage agent can secure a 5-year fixed rate of 4.79%, your monthly payment would drop to roughly $2,830. This difference of $130 per month amounts to $7,800 saved over a 5-year term, showcasing the significant impact of even a small rate difference.
This comparison highlights the importance of actively comparing offers. A mortgage agent can access rates from various lenders, including those beyond the big banks, potentially securing you a lower rate and better terms than what RBC might initially present.
Comparing Your Mortgage Renewal Options (HSBC to RBC transition)
Evaluating your options at renewal is crucial, especially when your mortgage has transitioned from one major bank to another. Here's a comparison of staying with RBC versus switching to a new lender, keeping in mind the former HSBC context:
| Feature | Renewing with RBC (Former HSBC Mortgage) | Switching to a New Lender |
|---|---|---|
| Rate Negotiation | Possible, but initial offer may not be the lowest. Leverage other offers. | Often secures more competitive 'new client' rates. |
| Mortgage Stress Test | Generally not required if renewing with same lender (RBC). | Exempt for most uninsured renewals (no increase in balance) as per OSFI B-20 updates. |
| Costs & Fees | Minimal to none (no legal/appraisal fees typically). | New lender often covers legal/appraisal fees for a 'straight switch'. |
| Process & Effort | Simplest, often just signing a renewal form. Lower paperwork. | Requires new application, credit check, and potentially more paperwork. |
| Mortgage Features | May be limited to RBC's standard products/options. | Access to a wider range of products, terms, and features from various lenders. |
| Loyalty Perks | Potential for preferred client status or bundling discounts with RBC. | Opportunity to establish new banking relationships with new loyalty programs. |
What steps should I take for my HSBC mortgage renewal with RBC?
To navigate your HSBC mortgage renewal now managed by RBC effectively, begin by reviewing RBC's renewal offer carefully once you receive it. Do not sign it immediately.
Next, shop around. Contact a qualified Canadian mortgage agent or other lenders to compare rates and terms. Be transparent about RBC's offer to see if other lenders can beat it. Consider your long-term financial goals, such as early prepayment options, flexibility, or if you plan to move soon. Finally, negotiate with RBC using any better offers you receive; they may match or beat a competitor's rate to retain your business. This proactive approach ensures you're securing the best possible mortgage for your next term. You can start this process up to 120 days before your maturity date.
Understanding your options at renewal is critical, especially with the transition of HSBC mortgages to RBC. Don't settle for the first offer; actively shopping around can save you thousands of dollars over your mortgage term. For personalized guidance and to compare RBC's offer against dozens of other lenders, consider getting a free, no-obligation mortgage renewal review. You can also utilize our online calculator to quickly assess potential savings by exploring different rates and terms.
Frequently asked
Did RBC acquire all of HSBC Canada?
Yes, RBC completed the acquisition of HSBC Canada's retail and commercial banking business on March 28, 2024. This means all HSBC bank accounts, credit cards, and mortgages in Canada are now under RBC's management.
Will my HSBC mortgage rate change now that RBC owns it?
No, your current HSBC mortgage rate will not change until your scheduled renewal date. RBC is legally obligated to honour the terms of your existing contract, including your interest rate and payment schedule, until its maturity.
When should I start looking for new mortgage rates for my renewal?
You should start exploring your mortgage renewal options and comparing rates approximately 4-6 months before your maturity date. This gives you ample time to research, apply, and secure a new mortgage without feeling rushed, typically receiving an official offer from RBC within 120 days of maturity.
Will RBC automatically renew my mortgage?
RBC will send you a renewal offer before your maturity date. If you do not sign a new term or make other arrangements, your mortgage may automatically renew into an open-term, variable-rate mortgage at a higher posted rate. It's crucial to actively choose your renewal path.
Can I switch from RBC to another lender without penalty at renewal?
Yes, you can switch from RBC to another lender without penalty at your mortgage maturity date. You are only penalized if you break your current term early. Many new lenders will also cover typical switching costs like appraisal and legal fees for a 'straight switch'.
Do I need a lawyer to switch my mortgage at renewal?
If you are switching lenders, you will typically need a lawyer to complete the transfer of the mortgage charge from RBC to the new lender. However, many lenders offer to cover these legal fees as an incentive for new clients.
What is the OSFI B-20 stress test exemption for renewals?
The OSFI B-20 stress test exemption, updated in November 2024, generally allows uninsured mortgage holders to switch to a new federally regulated lender at renewal without re-qualifying at the stress test rate, provided the mortgage amount is not increasing significantly.
Should I use a mortgage broker for my RBC mortgage renewal?
Using a mortgage broker for your RBC mortgage renewal is highly recommended. Brokers have access to rates from dozens of lenders, including banks, credit unions, and monoline lenders, allowing them to find you the most competitive rate and terms beyond what RBC might offer directly.
What if I want to increase my mortgage at renewal?
If you wish to increase your mortgage amount at renewal, this becomes a refinance rather than a simple renewal. You will likely need to re-qualify for the entire new mortgage amount, including passing the OSFI B-20 stress test, even if you stay with RBC or switch lenders.
What happens if I don't sign my renewal offer from RBC?
If you don't sign your renewal offer, your mortgage may automatically roll over into an open, variable-rate mortgage, usually at RBC's posted prime rate plus a premium. This typically results in higher payments and is less favourable than negotiating a new fixed or variable term.