Why the mailed rate is high
Lenders price renewals knowing most people sign without shopping. The rate offered to an existing customer who never negotiates is not the rate offered to win a new customer. Making one phone call before signing frequently moves the number.
Switching costs less than you think
At the end of a term there is no prepayment penalty. Moving to a different lender is a straight switch, and many lenders cover the legal and appraisal costs to attract the business. The exception is a collateral charge mortgage, where a new registration may be needed - still often worth it, but worth pricing.
- No penalty at the end of the term
- Many lenders pay switch costs
- Collateral charges add a registration step
Renewal is the right time to restructure
It is the one moment you can change the mortgage freely. Consolidate high-interest debt, shorten or lengthen the amortization, add a home equity line, or change from variable to fixed. Doing any of these mid-term usually costs a penalty. At renewal it costs nothing.
Start four months out
Rate holds typically run up to a hundred and twenty days. Starting early means you can lock a rate and still take a better one if the market improves. Starting the week the term ends means taking whatever is available.
Frequently asked questions
- Does switching lenders at renewal cost me anything?
- Usually not. There is no penalty at the end of a term and many lenders cover legal and appraisal costs to win the switch.
- How early should I start?
- About four months before maturity, which lines up with the standard rate hold period.
- Can I add debt consolidation at renewal?
- Yes, if you have enough equity. Renewal is the cheapest time to restructure because no penalty applies.