Start four to six months early
Most lenders allow you to renew within one hundred and twenty days of maturity without penalty. That window is your shopping period. A rate hold from a competing lender costs nothing and protects you if rates rise while you decide. Starting early turns a deadline into an opportunity.
The renewal letter is an opening offer
Lenders count on inertia, and the first number on the renewal notice reflects that. It is almost never the best rate they will do, and it is often well above what a new lender would offer for the same file. Treat it as the start of a negotiation, not the end.
- Compare the offer against at least two other lenders
- Ask your current lender to match a competing quote
- Check the fine print for collateral charge or no-frills terms
Switching lenders at renewal is free of penalty
At maturity there is no prepayment penalty for moving your mortgage. The new lender often covers the appraisal and legal costs of a straight switch. You will re-qualify under current rules, so keep your income documentation and credit tidy heading into the window.
Renewal is also restructuring time
Want to shorten the amortization now that income has grown, extend it to lower payments, add a HELOC, or pull equity for a renovation? All of that is far easier and cheaper at renewal than mid-term. Decide what the next term needs to accomplish before you sign anything.
Frequently asked questions
- What happens if I do nothing at renewal?
- Most lenders roll you into an open or short-term product at a poor rate. Never let a mortgage auto-renew without reviewing your options first.
- Do I re-qualify if I stay with my lender?
- Generally no. A straight renewal with the same lender does not require re-qualification, which is useful if your income or credit has changed.
- Can I negotiate my renewal rate?
- Yes, and you should. Bring a competing written offer and most lenders will sharpen their number rather than lose the mortgage.