Mortgage renewal season: why you shouldn’t sign your bank’s first offer

Your renewal letter shows up in the mail or your inbox, and it already has a rate on it. There's a signature line at the bottom and a deadline. It feels like the decision has already been made for you, and all you have to do is agree.

Your current lender is betting on exactly that feeling. A renewal letter is not a negotiation, it's an offer, and it's usually not their best one. The number on that page is a starting point, not a verdict.

What happens at renewal

When your term ends, you have a choice. You can sign the renewal as-is, negotiate that same lender for a better rate, or move your mortgage to a different lender entirely.

This is where a broker earns their keep. Instead of one offer from one lender, you get your file shopped across several, compared side by side. I’ll do the math on what actually saves you money once you account for the product, the prepayment privileges, and the term length. There is SO much more to your mortgage than rate!

When to start looking

The best time to start this conversation is 4 to 6 months before your maturity date, not the week the letter arrives. That gives enough runway to compare options properly, and in most cases you can lock in a new rate ahead of time without any cost or commitment if the rate happens to drop before your term is actually up.

The bottom line

Signing your renewal letter isn't wrong. It's just worth knowing it's optional before you do it. A five-minute conversation before your deadline costs you nothing and tells you exactly where you stand.

If your renewal is coming up in the next six months, reach out through karalenius.ca and I'll be able to quickly help you determine which course of action is best for you.