Start 120 days out
Most lenders will hold a rate for you up to 120 days before maturity, and so will competing lenders. Starting early means you can lock protection against increases while still shopping. Waiting until the last week removes every option except signing what you were sent.
The renewal letter is an opening offer
Lenders price renewals knowing most borrowers sign without negotiating. A posted renewal rate is frequently well above what the same lender offers a new client with the same profile. Asking is free, and a competing approval in hand is what makes the ask work.
Switching lenders costs less than most people think
A straight switch at maturity, with no new money and no change to the amortization, typically costs only discharge and assignment fees, and many lenders cover them. You do have to requalify, including the stress test, unless you stay with your current lender.
- Switch: same balance, new lender, small or covered fees
- Refinance: new money added, full legal costs, appraisal likely
- Stay: fastest, but usually the highest rate
Options if the new payment is too high
Extending the amortization back out lowers the payment. Blending your existing rate with a new one can soften the jump on a mid-term change. Consolidating high-interest consumer debt into the mortgage sometimes lowers total monthly outflow even when the mortgage payment rises. Each of these has a cost; the point is that there is more than one lever.
Fixed or variable at renewal
Fixed buys certainty for the term. Variable moves with prime and typically carries a smaller penalty if you break early. If you may sell or refinance mid-term, the penalty difference alone can outweigh the rate difference.
Frequently asked questions
- When should I start my renewal?
- Four months before maturity. That is when rate holds begin and when you still have leverage.
- Do I have to requalify to switch lenders?
- Yes, for a switch to a new lender you go through an approval, including the stress test. Staying with your current lender at renewal does not require requalification.
- Can I extend my amortization at renewal?
- Often yes, subject to lender policy and whether the mortgage is insured. It lowers the payment and increases total interest.