Your mortgage renewal letter is an offer, not a bill
Roughly every renewal letter I see is priced above what the same borrower could get elsewhere. You are allowed to negotiate it, and you are allowed to leave. Here is how renewals actually work.
- Start 120 days out — most lenders will hold a rate that far ahead
- Switching lenders at renewal usually means no stress test
- Signing the letter is the one option that is never negotiated
- I compare your offer against 30+ lenders, free
- No credit check to get a read on your options
Thank you
Your details are with me. I will call you within 1 business day from (647) 761-1646 — please save my number so you recognise the call.
- A 10-minute call to confirm your goals and numbers.
- I check your file against 30+ lenders and send you the realistic options.
- If it makes sense, we apply. If it doesn't, I tell you that too.
Why the letter in your mailbox is priced the way it is
A renewal letter is the cheapest mortgage a lender will ever write. There is no application to underwrite, no appraisal to order, no broker to compensate and no risk of losing you to anyone — unless you do something about it. Most lenders price that convenience in, and most borrowers sign because the form arrives pre-filled and the date is approaching.
I spent years inside CIBC and Scotiabank. Renewal retention is a measured, managed number, and the first offer is rarely the floor. That is not a scandal; it is how the business works. But it means the only version of your renewal you should never accept is the first one, unsigned-and-unquestioned.
You have three real options at renewal, and they are not equally priced:
- Sign the offer. Fastest, no paperwork, usually the most expensive over the term.
- Negotiate with your current lender. Free to try. Works better when you can name a specific competing offer, which is the part most people cannot do on their own.
- Switch to a new lender. More paperwork, frequently the sharpest pricing, and since late 2024 it has become considerably easier.
The rule change that makes switching easier than it was
This is the single most useful thing to know about renewals right now, and most homeowners have not heard it.
Effective 21 November 2024, OSFI — the federal banking regulator — stated that it does not expect lenders to apply the minimum qualifying rate to uninsured "straight switches" at renewal. Borrowers with insured mortgages have been exempt at renewal since January 2024, and in December 2024 the federal government confirmed the exemption extends to insurable mortgages originated at a federally regulated lender too.
A straight switch means you move to a new lender keeping the same loan amount and the same remaining amortization, with no new money advanced. Do that, and you are assessed at the contract rate rather than the stress-tested qualifying rate.
Before, a homeowner whose income had not kept pace could be effectively trapped — unable to pass the stress test anywhere else, and so stuck with whatever their lender offered. That trap is substantially gone for straight switches.
Two honest caveats. First, "no stress test" is not "no qualification" — the new lender still underwrites your income, your credit and the property. Second, the moment you increase the balance or stretch the amortization, it stops being a straight switch and the qualifying rate applies again. If you want to take equity out, that is a refinance, and it is a different test. Full detail in the stress test guide.
Your renewal timeline
The work that saves money happens before the letter arrives, not after.
- 120 days outThe sweet spot. Most lenders will hold a rate for you 90 to 120 days ahead, which means you can lock something in and still keep shopping. Nothing to lose by starting here.
- 90 days outYour lender's formal renewal offer usually lands around now. Treat it as the opening bid and a useful benchmark, not a decision.
- 60 to 90 days outEnough time to complete a switch comfortably. A switch needs lender approval, a lawyer or title company, and a discharge from your current lender — unhurried, that is a few weeks.
- 30 days outStill workable, but the timeline is tight and you lose leverage. Your lender knows a switch is becoming impractical for you.
- Past the maturity dateIf nothing is signed, most lenders roll you onto a short-term or open rate that is materially more expensive. This is the costliest place to be, and it happens to people simply because the letter got buried.
What I check on every renewal
A renewal is not only about the rate. These are the terms that decide what the next five years actually cost you.
The rate against the real market
Not against the posted rate, and not against last year. Against what lenders are actually writing this week for a borrower with your profile, equity position and property type.
The prepayment penalty method
The clause that decides what it costs if life changes mid-term. Two lenders at an identical rate can differ by thousands of dollars on an interest rate differential, depending entirely on whether they calculate it against posted or contract rates. Nobody reads this clause until they need it. How penalties work.
Standard charge or collateral charge
A collateral charge registers your property for more than you borrowed and makes your next switch more expensive, because it generally cannot be assigned to a new lender cheaply. It is a decision about your flexibility in five years' time. What a collateral charge does.
Prepayment privileges
How much you can pay down annually without penalty, and whether you can double up payments. Worth real money if you ever receive a bonus, an inheritance or a good year.
Term length against your plans
The cheapest rate on a five-year term is not cheap if you sell in year three and pay a penalty. If a move, a separation or a renovation is plausible, the term should reflect that.
Whether the amortization quietly grew
Some renewal offers reset the amortization, which lowers the payment and raises the lifetime interest substantially. It reads like a better deal on the page. It usually is not.
What a switch involves, realistically
People avoid switching because they imagine it is like buying a house again. It is not. There is no purchase, no closing date to coordinate and no moving.
You complete an application, the new lender underwrites your income and credit and confirms the property's value, and a lawyer or title company handles the discharge and the new registration. On a straight switch at renewal, many lenders cover the legal and appraisal costs to win your business — so ask, because it is frequently the difference between the two offers being close and one being obviously better.
If your current mortgage is a collateral charge, this is where it bites. A collateral charge usually cannot be simply assigned across to the new lender; it typically requires a discharge and a fresh registration, and those legal costs may land on you. It does not make switching impossible — it makes it more expensive, and it has to be priced into the comparison rather than discovered at the lawyer's office.
And there is no penalty for leaving at renewal. Your term has ended; the contract is over. Penalties only arise when you break a mortgage mid-term.
Honest answers
Should I just sign my bank's mortgage renewal letter?
Do I need to requalify or pass the stress test to switch lenders at renewal?
How early can I start my mortgage renewal in Canada?
Is there a penalty for switching lenders at renewal?
Can I switch my mortgage with bad credit at renewal?
My renewal offer is higher than the rates I see advertised. Why?
What happens if I miss my mortgage renewal date?
Does switching mortgage lenders affect my credit score?
Related
Send me your renewal offer
I'll tell you plainly whether it's competitive. If your lender is already giving you a good number, that's a two-minute answer and you've lost nothing.
Aleksey Tsoy · Mortgage Agent (Level 1) · Licence #M20001520 · Centum Financial Services LP · Brokerage Licence #13054