Most people are unaware of the legal effect of switching lenders. Most assume - quite reasonably - that the old mortgage is always discharged (paid out) and a new one registered. In fact this is rarely the case when a mortgage is simply being switched "as is" or with a reduced balance. A mortgage is almost always discharged and then the new one registered, however, when a mortgage is being increased in size from its current balance, even though that increase does not take it over - or even up to - the original balance.

 In most Provinces a switch of the current or lower balance requires only a simple assignment of interest in the mortgage to be executed by all parties and registered on title. This assignment also attaches the specific charge terms that will have legal effect, and replaces those of the transferring institution. So even though the old mortgage is still registered on title, all those old terms and conditions registered by your previous lender will be completely replaced by those of your new lender under the assignment of interest. 

A little known, but very valuable legal fact about the transfer of mortgages is that if you paid a default insurance premium (CMHC or GE Capital) on the original mortgage, it doesn't matter how many times you switch lenders, that insurance will remain in effect. In fact, with some limitations, insurance can be ported not only from one lender to another, but also from one property to another! The main limitation here (a significant one today) applies only to CMHC insured mortgages. It is that the mortgage must have been created after April 1, 1996 to qualify for portability to a different property. (Portability to a different lender has always been allowed).

 The importance of this feature is that if you have not been able to accumulate 25% or more equity in your property before switching lenders or properties, then (subject to certain conditions) you will not have to pay the insurance again, and will not be constrained in any way by your lack of equity.