Your Mortgage is Up for Renewal — Here's Why You Shouldn't Just Sign

What the Renewal Letter Actually Is

When your mortgage term ends, your lender sends you a renewal letter with a new rate and term offer. It arrives, it looks official, and it's designed to be signed and returned quickly — often with language implying that missing the deadline has consequences. What it doesn't tell you: this is an opening offer, not a final offer. Banks know that the majority of Canadians will sign whatever arrives in the mail rather than shop around. This is their profit model.

How Much Auto-Renewing Actually Costs

The spread between a bank's posted renewal rate and a rate negotiated through a broker is typically 0.25% to 1.00% or more, depending on current market conditions. That might sound small, but consider: on a $350,000 remaining mortgage balance, the difference between 5.50% and 4.75% over a 5-year term is approximately $12,000 in additional interest payments — paid to your bank, not going toward your principal.

The challenge is that your current lender knows you're likely to stay put. Switching lenders at renewal — a process called a "transfer" or "switch" — involves no legal fees and no appraisal in most cases. But your bank won't tell you this. They benefit from your inertia.

What to Do 4–6 Months Before Renewal

• Contact a mortgage broker as soon as you know your renewal date. Many rate holds go out 120 days. This gives you time to shop, not scramble.
• Pull together your financial documents — recent pay stubs, NOA, and property information. Having these ready speeds up the process significantly.
• Understand your current balance and remaining amortization. This affects which products and lenders make sense for your situation.
• Consider whether your needs have changed. Renewal is an opportunity to rethink your mortgage structure — change from variable to fixed (or vice versa), access equity for a renovation, consolidate debt, or adjust your amortization period.

How a Broker Shops the Market for You

A mortgage broker at renewal submits your file to multiple lenders simultaneously. The lenders compete for your business. Jessy reviews every offer, compares the effective cost of each (not just the headline rate — also prepayment privileges, penalty structure, and portability), and recommends the best overall option for your situation.

The entire process — from initial conversation to rate hold to transfer completion — typically happens in under three weeks and costs you nothing. Brokers are compensated by the lender you choose.

A Real Savings Example

A Nepean homeowner came to Jessy with a renewal letter from their bank offering 5.89% on a 5-year fixed. They had $280,000 remaining on their mortgage with 18 years left on amortization. Jessy placed their renewal at 4.99% with a different lender — a no-cost switch with no legal fees. Over five years, the difference: approximately $11,200 in interest savings. The entire process took two weeks.

If your mortgage is renewing in the next six months, don't sign anything until you've spoken with a broker. See our mortgage renewal page or book a free consultation to review your renewal options.