Mortgage Renewals · BC & Alberta
The letter in the mail is an offer, not a verdict.
Renewal is the one moment your mortgage is fully portable and the one moment most people do nothing. Signing the form that arrives takes four minutes, which is exactly what it is designed to take. Twenty minutes of comparison is usually worth more.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
What renewal actually is
Your obligation ends. Then it starts again on new terms.
At the end of a term the balance you still owe becomes due. In practice almost nobody pays it off, so the lender offers a new term and most borrowers accept. That acceptance is a fresh contract, and it is the only routine moment when you can move the entire mortgage to another lender without a prepayment penalty.
Which is precisely why the offer arrives early, pre-filled, and easy to sign. It is not sinister. It is a business protecting a customer it does not want to lose, and it works, because comparing takes effort and the deadline creates pressure.
Two things worth knowing. Switching lenders at renewal usually means re-qualifying, which matters if your income or credit has changed since you last applied. And staying put does not mean accepting the first number — an incumbent lender that knows you are shopping often improves its offer.
- What your current lender is offering against what the wider market will do
- Whether you would still qualify elsewhere, honestly assessed before you apply
- Switch costs: discharge, legal and appraisal, weighed against any benefit
- Fixed or variable, and the term length that fits your actual plans
- Prepayment privileges and how a break penalty would be calculated
- Whether to blend, extend, or simply take the incumbent’s improved offer
General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
At the end of a term the balance you still owe becomes due. In practice almost nobody pays it off, so the lender offers a new term and most borrowers accept. That acceptance is a fresh contract, and it is the only routine moment when you can move the entire mortgage to another lender without a prepayment penalty.
Which is precisely why the offer arrives early, pre-filled, and easy to sign. It is not sinister. It is a business protecting a customer it does not want to lose, and it works, because comparing takes effort and the deadline creates pressure.
Two things worth knowing. Switching lenders at renewal usually means re-qualifying, which matters if your income or credit has changed since you last applied. And staying put does not mean accepting the first number — an incumbent lender that knows you are shopping often improves its offer.
- Switch costs: discharge, legal and appraisal, weighed against any benefit
- Whether you would still qualify elsewhere, honestly assessed before you apply
- Prepayment privileges and how a break penalty would be calculated
- Fixed or variable, and the term length that fits your actual plans
- What your current lender is offering against what the wider market will do
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
- Whether to blend, extend, or simply take the incumbent’s improved offer
Timing
Start about four months out.
Enough runway to secure a rate hold, weigh the options properly, and avoid deciding under deadline pressure. Here is the sequence.
Step 01
Four to five months before maturity
Dig out your maturity date and current balance. Most lenders will hold a rate for a period in advance, so this is when a hold becomes useful rather than theoretical.
Step 02
Three to four months before
Review what has changed since you last applied: income, employment, credit, other debts, plans for the property. This determines whether switching is realistic or whether staying with the incumbent is the sensible route.
Step 03
Two to three months before
Compare the incumbent offer against the market. If a switch makes sense the application goes in now, with enough time for the new lender to complete its review.
Step 04
One to two months before
Documents, lender conditions and instructions to the lawyer or notary if the mortgage is moving. A switch is administratively lighter than a purchase but it is not instant.
Step 05
Maturity
The new term begins. If nothing was arranged, many lenders move the mortgage onto a higher-cost default arrangement, which is an expensive way to buy time.
General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
Rate is not the whole contract
The cheapest number on the page can be the expensive choice.
Renewal offers get compared on one figure because one figure is easy to compare. But the terms attached to that figure decide what the mortgage actually costs you if anything changes over the next few years, and something usually changes.
What gets compared
The interest rate
The monthly payment
Whether the paperwork is easy
What decides the real cost
How a break penalty is calculated, which varies enormously between lenders
Prepayment privileges, and whether you would realistically use them
Portability, if there is any chance you move during the term
Standard versus collateral charge registration, which affects switching later
Whether the rate is restricted to a product with conditions attached
The term length, matched to your plans rather than to the lowest rate on offer
No claim is made that a better rate is available elsewhere. Sometimes your current lender is the right answer. General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
Mortgage Tools
Run your own numbers.
Estimates for planning — not approvals, rate offers or advice. When the numbers raise questions, that’s exactly what a twenty-minute conversation is for.
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Easy to use Canadian Mortgage Calculator jam-packed with features.
Renewal Calculator
Easy to use Canadian Mortgage Calculator jam-packed with features.
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All calculator results are estimates for illustration only. They are not a commitment to lend, a rate offer, a pre-qualification, a pre-approval, or financial advice. Actual qualification depends on a full review of your credit, income, documentation and the policies of individual lenders. Tax rules and insurance premiums are subject to change.
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Related
Where people usually go next.
Mortgage Refinancing
If you want to change the balance rather than just the terms, renewal is the cheapest moment to do it.
Read more →
Home Purchase Mortgages
Renewing and moving at the same time changes the sequence. Worth planning together.
Read more →
Self-Employed Mortgages
If your income moved to a business since you last applied, re-qualifying is the thing to check first.
Read more →
Renewal questions
What people ask when the letter arrives.
General information for British Columbia and Alberta, not advice on your file. Nothing here claims a better rate is available than your current lender’s.
Do I have to re-qualify to switch lenders at renewal?
Generally yes. A new lender underwrites the file as a new application, so income, credit and existing debts all come back into play. If things have changed since you first applied, that is the first thing to look at, because it determines whether switching is realistic at all.
Is there a penalty for switching at renewal?
No prepayment penalty applies at maturity, which is what makes renewal the cheap moment to move. There can still be administrative costs such as discharge, legal and sometimes appraisal fees, and some lenders cover part of those to win the business.
What happens if I do nothing?
It varies by lender. Many will move the mortgage onto an automatic renewal or a higher-cost default arrangement, and some convert it to an open mortgage at a considerably higher rate. None of those outcomes is where you want to be, and all of them are avoidable with a few months of notice.
Can I negotiate with my current lender?
Yes, and you should. The first offer is rarely the best one available, and an incumbent that knows you have a competing option tends to sharpen its pencil. Sometimes the incumbent wins that comparison outright, which is a fine outcome.
Should I switch to a shorter or longer term?
It depends on your plans rather than on a rate forecast. If you might sell or refinance inside three years, a five-year fixed with an expensive break penalty is a poor fit however good the rate looks. If you want maximum payment certainty and expect to stay put, a longer term does that job.
Can I increase my mortgage at renewal?
Increasing the balance makes it a refinance rather than a straight renewal, which means a full application and different lender limits. The advantage of doing it at maturity is that no prepayment penalty applies, so if you were considering both, renewal is the moment.
