Your Mortgage Renewal Is Coming. Don't Just Sign the Paper.
70% of Canadian homeowners automatically renew with their current lender — and leave thousands on the table. Here's exactly what to do instead.
of Canadians renew with their existing lender without shopping
CMHC Housing Survey
average savings when switching lenders at renewal on a $500K mortgage
Industry estimate, 0.50% rate gap
days early you can start locking in renewal rates — most people wait 2 weeks
Most Canadian lenders
The Renewal Timeline: What to Do and When
Start at 120 days. Don't wait for your lender to come to you.
Start Shopping
Most lenders allow you to lock in a renewal rate 120 days (4 months) before your maturity date. This gives you rate-hold protection if rates rise while you finalize your decision.
Your Lender Sends a Renewal Offer
Your current lender will mail or email a renewal offer. This is rarely their best rate — it's their starting position. Use it as a baseline, not a final answer.
Compare & Negotiate
Bring competing offers to your current lender or commit to a new one. Switching lenders at renewal costs nothing — your new lender covers the transfer. SenTrust Mortgages handles all of this for you.
New Mortgage Takes Effect
Your new mortgage begins on the maturity date of the old one. If you do nothing, your lender will automatically renew you — usually at a posted (non-discounted) rate.
4 Costly Renewal Mistakes to Avoid
These mistakes collectively cost Canadian homeowners billions of dollars each year.
Accepting the first renewal offer
Your lender's initial renewal rate is rarely competitive. Banks routinely offer 0.50%–1.00% above the best available market rates at renewal, counting on inertia.
Fix: Get at least 2–3 competing rate quotes before deciding. Your broker does this for free.
Not starting early enough
Many homeowners start shopping only 2–3 weeks before maturity, leaving no time to switch lenders or negotiate effectively.
Fix: Start 120 days before your maturity date. This gives you rate-hold protection and full negotiating power.
Choosing the same term out of habit
Your situation may have changed. If rates are expected to fall, a shorter term might serve you better. If you need payment certainty, a longer fixed term makes sense.
Fix: Review your financial goals, income stability, and rate forecasts before committing to a term.
Ignoring prepayment privileges
Most homeowners focus only on rate but ignore prepayment options. A higher-rate mortgage with 20% annual lump-sum privilege can result in less total interest paid than a lower-rate mortgage with restrictive terms.
Fix: Compare the full mortgage package — rate, prepayment, portability, and penalty structure.
Renewal vs. Refinance: Which Is Right for You?
Renewal keeps your mortgage the same size; refinancing lets you access equity or change your terms mid-term. Here's how they compare:
| Aspect | Renewal | Refinance |
|---|---|---|
| Timing | At maturity date only | Any time, but penalty applies |
| Penalty | None | 3 months' interest to full IRD |
| Lender switch | Free, no cost | Legal fees ~$1,000–$1,500 |
| Amount | Existing balance only | Up to 80% of home value |
| Access equity | No | Yes |
| Change amortization | Limited | Full flexibility |
| Best for | Rate savings, lender switch | Equity access, debt consolidation |
Frequently Asked Questions
When should I start shopping for a mortgage renewal in Canada?
Start shopping 120 days (4 months) before your mortgage maturity date. Most lenders allow you to lock in a rate up to 120 days early, giving you rate-hold protection while you compare options. If you wait until the last minute, you'll have less leverage and fewer options.
Can I switch lenders at mortgage renewal without a penalty?
Yes. Switching lenders at renewal is completely penalty-free in Canada. Your new lender typically covers the legal costs associated with transferring the mortgage (called a 'straight switch'). This is the best time to shop for a better rate.
How much can I save by shopping my mortgage renewal?
On a $500,000 mortgage balance, a 0.75% rate improvement saves approximately $21,000 in interest over a 5-year term. Even a 0.25% improvement saves $7,000. Most Canadians who use a mortgage broker at renewal save between $5,000 and $20,000 depending on their balance and rate gap.
What happens if I don't renew my mortgage by the maturity date?
If you do nothing, your lender automatically renews you onto an open mortgage at their posted rate — which is significantly higher (often 1–2% above market). You have a short grace period (typically 30 days) before this becomes a formal open mortgage. Act before your maturity date.
Should I choose a fixed or variable rate at renewal?
This depends on your outlook for the Bank of Canada rate and your personal risk tolerance. If you believe rates will fall further, a variable rate or shorter fixed term lets you capture those decreases. If you want payment certainty or believe rates have bottomed, a 3 or 5-year fixed locks in today's rate. A mortgage broker can model both scenarios with your specific numbers.
Can I increase my mortgage amount at renewal?
Not at a standard renewal — a renewal only covers your existing balance. To access additional funds (equity), you'll need to refinance, which can be done at the same time as a renewal but involves different paperwork and may trigger legal fees. This is worth considering if you have significant equity and a specific purpose for the funds.
Related Resources
Renewing in the Next 120 Days?
We'll compare rates from 50+ lenders and present you the best renewal options — for free. Most clients save $8,000–$20,000 over their next term.
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