Mortgage Renewals: Should You Stick with Your Lender or Shop Around?

Many Canadians let their mortgage renew automatically, but doing nothing could cost you thousands over the life of your loan. Here's what you need to know before signing on the dotted line again.

What Is a Mortgage Renewal?

A mortgage renewal happens when your current mortgage term comes to an end, but you still have a balance left to pay. At that point, you’ll need to either agree to new terms with your current lender or move your mortgage to a different lender. It’s a chance to revisit your rate, term length, and features—and potentially save money or get a better fit for your needs.

Why People Just Sign the Renewal Offer

Many people stay with their current lender at renewal because it’s easy and fast—they just sign the renewal offer and move on. They often assume the rate they’re offered is the best they can get, and with busy schedules, it’s one less thing to worry about. Lenders know this and count on homeowners not taking the time to shop around or negotiate better terms.

Why You Should Shop Around

Shopping around at renewal is important because your mortgage needs may have changed since you first signed. You might now qualify for a better rate based on your income, credit, or market conditions. Other lenders could also offer better terms or added perks that fit your goals. Working with a mortgage broker makes this process easier because they can compare options from multiple lenders at no cost to you, helping you find the best fit without the extra stress.

 What You Need to Compare

When reviewing mortgage renewal offers, it’s important to compare more than just the interest rate. You should also look at whether the mortgage is fixed or variable, what prepayment options are available, and what penalties apply if you break the mortgage early. It’s also a good idea to check if the mortgage is portable in case you move, and see if any lenders are offering extra incentives, like cashback or free appraisals, that could add more value.

When to Start the Process

It’s smart to start the mortgage renewal process about 4 to 6 months before your current term ends. This gives you enough time to review your financial situation, explore your options, and lock in the best rate available. Starting early can also protect you from possible rate increases, as some lenders allow early renewals that secure today’s rate even if your current term isn’t up yet.

How a Mortgage Broker Can Help

A mortgage broker can make the renewal process much easier by acting as your advisor, helping you figure out what works best for your situation. They shop around with multiple lenders to find you better rates and terms, handle all the paperwork, and manage the negotiations on your behalf. Best of all, using a broker is usually free because they are paid by the lender, not by you.

Conclusion:

Don’t let your mortgage auto-renew without taking a look at your options. A quick check could lead to better terms, a lower rate, or a plan that fits your lifestyle better. If you’re within 6 months of renewal, let’s talk—it’s worth it.

403.358.9041

mortgages@cindra.ca