When your mortgage term is ending, it can be tempting to just sign the renewal letter your lender sends and move on. The problem is that automatic renewals are often priced for the bank’s convenience, not your benefit. In a higher‑rate environment, your renewal is one of the biggest opportunities you have to save money, reduce risk, and align your mortgage with your current life.
This step‑by‑step guide explains how mortgage renewal works in Canada, how to avoid the most common renewal mistakes, and how Lethbridge homeowners can use renewal time to negotiate better terms or switch to a lender that fits them better.
Step 1: Know Your Renewal Date (and Start Early)
Every mortgage term has a maturity date. That’s the day your current term ends and you either need to renew, refinance, or pay off your balance.
- Your lender must send a renewal statement at least 21 days before the term ends for most fixed‑term residential mortgages.
- Waiting until you receive that letter, however, gives you almost no time to compare offers or switch lenders.
A better approach is:
- Mark your renewal date as soon as you sign your mortgage.
- Set a reminder 120 days (about 4 months) before that date.
- Use that 3–4 month window to review your situation, shop around, and talk with a mortgage professional in Lethbridge.
Starting early means you’re not under pressure and have time to move if a different lender can significantly improve your rate, payment, or flexibility.
Step 2: Re-evaluate Your Goals Before You Look at Rates
Renewal is the perfect time to ask, “What do I want from my mortgage for the next 3–5 years?”
Consider these questions:
- Has your income gone up, down, or become more variable (self‑employment, commission, etc.)?
- Are you planning to move, renovate, or buy a rental property?
- Do you want to pay the mortgage off faster or keep payments lower for now?
- Are you comfortable with some rate flexibility (variable/adjustable) or do you need the certainty of fixed payments?
Your answers affect:
- Whether a 1‑, 3‑, or 5‑year term makes sense.
- Whether fixed or variable type suits your risk tolerance and cash flow.
- Whether you should shorten your amortization to pay faster, or keep it longer to free up monthly cash.
- How important flexible prepayment options are for you.
Taking 15–20 minutes to get clear on your goals makes it much easier to compare renewal options later.
Step 3: Review Your Lender’s Renewal Offer — But Don’t Automatically Sign It
By law, most lenders must send a renewal statement at least 21 days before maturity. It typically includes:
- Remaining principal
- New proposed rate and term
- New payment amount and frequency
- Any fees or special conditions
Common issues with default renewal offers:
- The rate offered may be higher than what the lender would give if you pushed back or compared other offers.
- Automatic “sign and send back” forms are designed for speed, not for savings.
For Lethbridge homeowners, where balances are often in the mid‑$200K to $400K range, even a small rate difference can mean thousands of dollars over the next term. Treat the renewal letter as a starting point, not the final answer.
Step 4: Shop the Market — Compare Rates, Terms, and Features
Even if you think you’ll stay with your current lender, it’s smart to see what else is out there.
You can:
- Ask a local mortgage broker in Lethbridge to pull offers from multiple lenders based on your remaining balance, property, and income.
- Check posted and “special” renewal rates on major bank and credit union websites.
- Use online comparison tools to see average renewal rates for similar terms and credit profiles.
Compare more than just rate:
- Prepayment privileges (how much extra you can put down each year).
- Portability (if you might move and want to keep the same mortgage).
- Payment flexibility (skip‑a‑payment, increase payment options).
- Prepayment penalties if you break the mortgage before the term ends.
The goal is to identify 2–3 strong options that fit your goals and risk tolerance.
Step 5: Decide Whether to Stay or Switch at Renewal
Now compare your current lender’s offer to what the market can provide.
Staying with your current lender usually means:
- Simpler process: Often no full re‑qualification if you’re just renewing and not changing much.
- Minimal fees: Many lenders waive legal and appraisal fees for straight renewals.
- Less paperwork and faster turnaround.
Switching to a new lender can offer:
- Better rate or term: Lower payments or more suitable term length.
- Features tailored to your new goals (e.g., stronger prepayment options if you plan to pay down aggressively).
- Potentially better service or flexibility.
But switching may involve:
- Full re‑qualification (income, credit, debts) under current rules.
- Appraisal or legal costs if they’re not covered.
To decide, have a broker or advisor calculate:
- Total interest cost over the term under each option.
- Savings from a lower rate vs cost of switching.
If the net savings and better terms are meaningful, switching can be worth the paperwork. If not, negotiate with your current lender and use competing quotes as leverage.
Step 6: Negotiate Before You Lock In
Whether you stay or switch, there is usually room to negotiate—especially if you have good payment history and solid credit.
Use this approach:
- Share the competing rates and terms you’ve received from other lenders or your broker.
- Ask your current lender to match or beat the best realistic offer.
- Clarify which features matter most to you (rate, prepayments, flexibility, penalties).
Banks and credit unions know many customers don’t shop around at renewal, so simply showing that you’ve done your homework often leads to better pricing.
Step 7: Sign Carefully and Confirm the Details
Once you’ve chosen a renewal offer:
- Review your new rate, term, and payment amount.
- Confirm the amortization period (how many years are left).
- Double‑check prepayment privileges and any limits.
- Understand penalties for breaking the mortgage early.
Ensure all details match what you discussed. If anything is unclear, get clarification before signing. Once documents are signed and funded, changing terms can be costly.
Step 8: Plan Ahead for Your Next Term
After renewal:
- Update your budget to reflect the new payment.
- Set a calendar reminder 4 months before the new term ends so you’re never renewing under last‑minute pressure again.
- If your goal is to become mortgage‑free sooner, consider setting automatic lump‑sum payments or payment increases if your lender allows it.
You can also coordinate your renewed mortgage with other financial goals like investing, renovations, or starting a business.
Mortgage Renewal in Lethbridge: Why Local Advice Matters
National guides are helpful, but renewal decisions happen in the context of your local market and your personal goals. In Lethbridge, where home prices, income levels, and local lenders differ from major metro areas, good advice can be the difference between a renewal that “just works” and one that saves you thousands and gives you real flexibility.
A local mortgage specialist who understands Lethbridge:
- Knows which lenders are currently most competitive for your property type and balance.
- Can flag penalties or restrictions that don’t fit your plans.
- Helps you decide if now is the time to simply renew or to consider a refinance to consolidate debt, fund renovations, or adjust your amortization.
FAQ: Common Mortgage Renewal Questions
Q: When should I start thinking about renewing my mortgage?
A: Ideally 3–4 months before your term ends. That gives you enough time to evaluate offers, negotiate, and switch lenders if it makes sense, without feeling rushed.
Q: Can I negotiate my mortgage renewal rate?
A: Yes. Renewal offers are often negotiable, especially if you have a good payment history and other lenders are offering better rates or terms.
Q: Can I switch lenders at renewal without penalty?
A: In many cases you can switch at term maturity without breaking penalties, but you may face standard legal or appraisal fees. Some lenders cover part or all of those costs for strong clients.
Q: What happens if I don’t do anything?
A: Some lenders automatically renew you into a new term, often at less competitive rates. Others let the term expire, which can put you in default if you haven’t arranged a renewal or payout. Doing nothing is risky and can be expensive
If your mortgage term is coming up in the next 6–12 months, now is the time to start planning. A 15–20 minute conversation with an Expert Lethbridge Mortgage Broker can show you:
- Whether your renewal offer is competitive.
- How much you could save by negotiating or switching.
- Which term and product fit your current life and next 3–5 years.
Book Your Free Mortgage Renewal Review Today with Vittorio Oliverio – CPMG!
