Don't Accept Your Renewal Offer—Shop Around!

When your mortgage renewal notice arrives, don't just sign it and send it back! That's exactly what your lender is counting on—and it could cost you thousands of dollars.

The Renewal Reality: Most People Overpay

Here's a shocking statistic: Over 60% of Canadian homeowners simply accept their lender's renewal offer without shopping around.

Why? Because it's easy, convenient, and requires no effort. But that convenience is expensive.

The average Canadian could save $2,000-$5,000 over a 5-year term simply by negotiating or switching lenders at renewal.

Why Your Lender Gives You a Higher Rate

Your lender knows you're unlikely to shop around, so they offer you a rate that's typically 0.5-1.0% higher than what they offer new customers or what you could get elsewhere.

They're betting on your inertia—and they usually win.

The Renewal Timeline: When to Act

Your lender must send your renewal offer 21 days before your term expires (though most send it 120 days early).

Best timeline for action:

• 120 days out: Receive renewal offer, don't sign yet!
• 90-60 days out: Start shopping for rates with a broker
• 60-30 days out: Compare offers and negotiate
• 30-21 days out: Make final decision
• Renewal date: New mortgage takes effect

4 Strategies to Get the Best Renewal Rate

Strategy #1: Shop Multiple Lenders

This is where a mortgage broker shines. We can:

• Compare rates from 5+ lenders in minutes
• Present you with a clear comparison
• Handle all the paperwork
• Find lenders your current bank can't match

Best part: Shopping doesn't affect your credit score or obligate you to switch.

Strategy #2: Negotiate with Your Current Lender

Armed with competing offers, call your current lender's retention department (not the branch) and say:

"I've received offers from other lenders at [rate]. Can you match or beat this?"

They often will! Lenders hate losing customers and may offer:

• Rate match or better
• Cash-back incentives
• Waived fees
• Prepayment privileges

Strategy #3: Switch Lenders

If your current lender won't budge and you found a significantly better rate elsewhere, switching is straightforward:

• No penalty: At renewal, you can switch with zero penalty
• Minimal costs: $300-$500 in legal fees (some lenders cover this)
• Quick process: Usually 2-3 weeks
• Same property: No re-appraisal typically needed

Strategy #4: Blend-and-Extend (Early Renewal)

If rates are dropping and you're within 120 days of renewal, some lenders let you renew early by "blending" your current rate with the new rate.

When it makes sense: If rates have dropped 1%+ since you locked in your current rate.

Red Flags in Renewal Offers

Watch out for these tactics:

• Highlighted "No Action Required": They want you to do nothing and accept
• Short response deadline: Pressure to sign quickly
• Posted rates: Almost always higher than negotiable rates
• Reduced prepayment privileges: Check if they're taking away flexibility

When You Should NOT Switch

Sometimes staying with your current lender makes sense:

• Your rate is already extremely competitive
• You have a special product (like a collateral mortgage) that's hard to switch
• You're planning major renovations and want to access equity soon
• Your current lender matches competing offers

The Bottom Line

Your renewal is an opportunity, not just a formality. Think of it as getting a new mortgage—because you are!

Every time your term expires, you have leverage to negotiate or switch. Use it.

About the Author: Ragini is a FSRA-licensed mortgage broker with Blue Key Mortgage, powered by BRX Mortgage. She helps Ontario homeowners secure the best mortgage renewal rates through expert negotiation and market shopping.