If your mortgage renewal is coming up, don’t automatically sign the renewal offer from your current lender. Shopping around before renewing can help you find a better interest rate, more flexible mortgage terms, and a product that better fits your financial goals. For homeowners in Edmonton and across Alberta, comparing mortgage renewal options could potentially save thousands of dollars over your next mortgage term.
Why You Should Shop Around Before Renewing Your Mortgage
When your mortgage term ends, your current lender will typically send you a renewal offer. It may seem convenient to simply sign it and move on — but convenience doesn't necessarily mean you're getting the best mortgage available.
Your renewal is an opportunity to reassess your entire mortgage.
Different lenders may offer different:
Mortgage rates
Fixed and variable options
Prepayment privileges
Penalty structures
Amortization options
Payment flexibility
Features and restrictions
Even a relatively small difference in your mortgage rate can add up over several years.
Learn more about your options on our Edmonton Mortgage Broker & Mortgage FAQ page.
A Small Rate Difference Can Mean Significant Savings
Mortgage rates can look very similar at first glance, but a difference of even 0.25% can matter when you're carrying a large mortgage balance.
For example, imagine you have approximately $400,000 remaining on your mortgage. A lower rate could reduce your monthly payment and the amount of interest you pay throughout your next term.
But the lowest rate isn't always the best mortgage.
A mortgage with a slightly lower advertised rate could come with restrictions or penalties that make it more expensive if your plans change.
That's why a proper mortgage renewal comparison should look at the total mortgage product, not just the rate.
Your Current Lender's Renewal Offer Isn't Your Only Option
One of the biggest misconceptions about mortgage renewals is that you need to stay with your existing lender.
You don't.
At renewal, you may have the option to transfer your mortgage to another lender offering a more competitive product.
Recent changes have also made switching easier for many Canadian homeowners. Federal mortgage reforms have removed the minimum qualifying rate — commonly called the mortgage stress test — for qualifying "straight switches" at renewal in certain circumstances.
Generally, a straight switch means transferring your existing mortgage balance to another lender without increasing the mortgage amount or extending the remaining amortization.
The Government of Canada explains the current straight-switch mortgage rules and the conditions that apply.
This gives many homeowners even more reason to compare lenders rather than automatically accepting their existing lender's renewal.
When Should You Start Shopping for a Mortgage Renewal?
Ideally, you should start reviewing your options several months before your renewal date.
Starting early gives you time to:
Review your current mortgage
Compare available rates
Decide between fixed and variable options
Gather any required documents
Evaluate different lenders
Consider whether your financial goals have changed
Waiting until the last minute can limit your options and put unnecessary pressure on your decision.
If your renewal is approaching, speaking with a mortgage broker early can help you understand what may be available before you receive or accept your lender's offer.
Explore more Edmonton real estate and mortgage advice on the MetroYEG Blog.
Should You Choose a Fixed or Variable Rate at Renewal?
Your renewal is also a good time to reconsider whether a fixed or variable mortgage makes the most sense.
A fixed-rate mortgage provides predictable payments and protection from rate increases during your term.
A variable-rate mortgage can provide more flexibility and may benefit from decreases in lender prime rates, although it also exposes you to the possibility of rate increases.
There isn't one option that's right for everyone.
Your decision should consider your budget, risk tolerance, future plans, expected length of time in the property, and the features of the mortgage being offered.
Read our guide to fixed vs. variable mortgages and other Edmonton mortgage insights.
Renewal Is Also a Good Time to Review Your Financial Goals
Your life may look very different today than it did when you originally took out your mortgage.
Maybe your income has changed. Perhaps you're planning renovations, thinking about buying an investment property, consolidating higher-interest debt, or considering a move.
That makes renewal an excellent opportunity to review the bigger picture.
In some situations, simply renewing the existing mortgage makes sense. In others, refinancing or restructuring your mortgage may better support your financial goals.
Keep in mind that renewing, switching lenders and refinancing are not the same thing. Refinancing generally involves changing the mortgage balance or amortization and requires a new qualification process.
Why Work With a Mortgage Broker for Your Renewal?
When you renew directly with your current financial institution, you're reviewing the products available from that institution.
A mortgage broker can compare options from multiple lenders.
That can help you evaluate:
Competitive mortgage renewal rates
Different fixed and variable terms
Prepayment privileges
Mortgage penalties
Portability
Refinancing opportunities
Lender-specific features and restrictions
At MetroYEG, our mortgage team helps homeowners throughout Edmonton and Alberta compare renewal options and understand the numbers before making a decision.
The goal isn't simply to find the lowest advertised rate. It's to find a mortgage that makes sense for your financial situation and future plans.
Contact the MetroYEG Team to discuss your upcoming mortgage renewal.
Don't Automatically Sign Your Mortgage Renewal
A mortgage renewal may feel like routine paperwork, but it can be one of your best opportunities to improve your mortgage.
Before signing your lender's renewal offer, take some time to compare the market.
Ask yourself:
Is this a competitive rate? Are the terms right for me? Could another lender offer a better mortgage? Have my financial goals changed?
A little research before renewing could make a meaningful difference over the next several years.
If you have a mortgage renewal coming up in Edmonton or anywhere in Alberta, the MetroYEG Mortgage Team can review your current mortgage, compare available options and help you decide on your next step.
Frequently Asked Questions About Mortgage Renewals
Can I switch lenders when my mortgage is up for renewal?
Yes. You can switch mortgage lenders at renewal rather than staying with your current lender. Depending on the type of transfer and your mortgage, you may be able to switch without being subject to the mortgage stress test. Qualification requirements and other conditions can still apply.
How early should I start shopping for mortgage renewal rates?
It's a good idea to start reviewing your mortgage several months before the renewal date. Starting early gives you more time to compare rates, lenders and mortgage features without making a rushed decision.
Is it worth using a mortgage broker for a renewal?
A mortgage broker can compare mortgage products from multiple lenders rather than limiting your search to your existing financial institution. This can help you compare rates, terms, penalties and features before renewing.
Should I accept my bank's first mortgage renewal offer?
Not necessarily. Your lender's renewal offer may be competitive, but it's worth comparing it with other available options before signing. Even a small difference in the interest rate or mortgage terms can have a meaningful financial impact.
Do I have to pass the stress test when switching lenders at renewal?
Not always. Federal rule changes have removed the minimum qualifying rate requirement for certain mortgage switches at renewal, including qualifying straight switches. Specific eligibility requirements still apply, so it's important to confirm whether your mortgage qualifies before making a switch.
