Complete Checklist for Breaking Your Mortgage in Quebec

Breaking a mortgage is a structured process that requires careful preparation to avoid delays, unexpected costs, and administrative errors. In Quebec, this process involves several parties — your current lender, the new lender, a mortgage broker, a notary, and sometimes a certified appraiser — and coordination between these parties is essential for the operation to proceed smoothly. This comprehensive checklist guides you through each step, from initial preparations to finalization of the new mortgage contract, identifying vigilance points specific to the Quebec context and OSFI and AMF regulatory requirements.

1. Gather your financial documents: Start by assembling all necessary documents: your current mortgage contract (including all appendices and modifications), your latest loan statement showing balance, rate, and maturity date, your most recent municipal assessment notice, your last two notices of assessment from Revenu Quebec and CRA, your proof of income (pay stubs for the past 30 days, or financial statements if self-employed), and statements for all debts (credit cards, car loans, lines of credit, student loans).
2. Obtain your penalty in writing: Contact your current lender and request a written mortgage penalty statement. This document must indicate the exact penalty amount as of the request date, the calculation method used (IRD or three months' interest), the rates used in the calculation, the balance considered, and the calculation's expiration date. Note that the amount can change daily as it is based on current rates and the remaining balance.
3. Consult an AMF-certified mortgage broker: Contact a mortgage broker certified by the Autorité des marchés financiers for a free comparative analysis. The broker will assess your refinancing eligibility, compare offers from over 30 lenders, calculate your break-even point, and recommend the best strategy: full break, blend-and-extend, portability, or waiting for maturity.
4. Obtain pre-approval from the new lender: Once the broker is engaged, they will submit your application to the lender offering the best conditions. Pre-approval confirms your eligibility for new financing under OSFI's B-20 rules and locks in the rate for 60 to 120 days. Additional documents may be requested during this step.
5. Have your property appraised: The new lender will require an appraisal of your property by a certified appraiser who is a member of the Ordre des évaluateurs agrees du Quebec (OEAQ). This appraisal confirms the market value and loan-to-value ratio. Fees range from $350 to $500 and the report is generally available within 5 to 10 business days. Some lenders accept an automated valuation model (AVM) for properties in major urban centres.
6. Coordinate with the notary: The notary prepares legal documents for the cancellation of the old mortgage and registration of the new one at the Quebec Land Registry. Allow 2 to 3 weeks for preparation and signing. Notary fees include professional fees, cancellation fees, registration fees, and title searches. Ensure the funding date is coordinated between the notary, new lender, and old lender to avoid transition interest.
7. Verify the final discharge statement: Before signing at the notary's office, carefully review the discharge statement provided by your former lender. This document indicates the final balance to be repaid, including the breakage penalty, accrued interest up to the repayment date, and discharge fees. Compare this amount with the initial estimate to ensure there are no surprises.
8. Sign and finalize: Visit the notary to sign the new lender's mortgage documents and authorize repayment of the old loan. The notary ensures all funds are properly distributed: the balance and penalty to the old lender, legal fees retained, and the net balance (if refinancing with equity withdrawal) deposited into your account. Keep a copy of all signed documents for your records.

Quebec-Specific Vigilance Points

Several elements are specific to Quebec's legal context and deserve particular attention. The mortgage in Quebec is governed by the Civil Code of Quebec (articles 2660 to 2802) and constitutes a real right on the property, meaning the cancellation and registration process is more formalized than in common law provinces. The notary in Quebec fills a broader legal role than in other provinces, verifying title validity, absence of hidden charges, and compliance of all transactions. Additionally, if your property is a condominium, the certificate of location must be up to date (less than 10 years old or updated if modifications have been made) and the condominium's contingency fund may be examined by the new lender.

Discharge statement

An official document issued by the outgoing mortgage lender detailing the total amount required to fully repay the mortgage at a given date. This document includes the principal balance, accrued interest, the applicable breakage penalty, and administrative discharge fees. The discharge statement is transmitted to the notary who coordinates the transfer of funds between the new lender and the old one.