• What Happens at Renewal

When your mortgage term expires — whether that's a 1-year, 3-year, or 5-year term — the outstanding balance becomes due. Unless you have the funds to pay it off, you sign a new mortgage agreement for a new term. This can be with your current lender or a different one. The key distinction from mid-term refinancing is that there is no prepayment penalty: you are at the natural end of your contract, and the mortgage is simply up for renewal. This is when you hold the most leverage in your relationship with your lender, and it lasts only until you sign the renewal paperwork.

• The Auto-Renewal Trap

Your lender is required to send you a renewal notice 21 days before your term expires — but many send it 30 to 60 days out, and some send one several months early. The offer in that letter is almost never their best rate. Lenders know that most borrowers find the renewal process mildly tedious, assume switching is complicated, and will simply sign what arrives in the mail. The posted rates on renewal letters are typically the lender's standard posted rates, not the discounted rates they give new customers. Signing without looking elsewhere can lock you into a rate 0.25% to 1.0% higher than competitors would offer — for the full length of your next term. Treating a renewal letter as a starting point for negotiation, not a final offer, is the single most important shift in mindset you can make.

• Start Shopping 120 Days Before Expiry

Most lenders will let you lock in a renewal rate up to 120 days before your maturity date. This creates a four-month window to gather competing offers without any risk: if rates rise during those four months, you are protected by the locked-in rate; if they fall, you may be able to renegotiate with your lender or accept a better offer elsewhere before closing. Starting early also gives you time to use competing offers as negotiating leverage with your current lender. The worst position to be in is shopping for a new mortgage in the two to three weeks before your renewal date — at that point you have almost no leverage, limited time to process paperwork, and your current lender knows it.

• Rate Is Not the Only Factor

When comparing renewal offers, rate is the headline but not the whole story. A mortgage with a 0.1% lower rate that has significantly more restrictive prepayment privileges, a harsher penalty calculation method (big-bank IRD vs. monoline IRD), or no portability can cost you more over the term than a slightly higher rate with better features. Before comparing numbers across lenders, compare the structures. Ask each lender: what are the annual prepayment privileges (typically 10-20% of the original balance per year)? Is the mortgage portable to a new property if I move? How is the penalty calculated if I need to break? Does the product qualify for a refinance add-on or HELOC down the road? The answers matter as much as the rate in determining total cost.

• Negotiating With Your Current Lender

Once you have two or three competing offers in hand, call your current lender's retention team — not the general service line, but specifically the department that handles renewals. Tell them you are prepared to move your mortgage to a competing institution and provide the rate you have been quoted. Most retention teams have access to rates below the posted renewal offer, but they will not volunteer them proactively. The conversation should be direct and businesslike: "I've received an offer of X from another lender. What can you do to match or beat it?" If they match, the renewal process is seamless because you stay in place. If they can't or won't, you switch with confidence knowing you've done your due diligence.

• The Value of a Mortgage Broker at Renewal

A mortgage broker can shop your renewal across dozens of lenders simultaneously, including monoline lenders like First National, MCAP, and Merix that do not have branch networks and consequently offer sharper pricing. Brokers are typically paid by the lender, not by you, so their service costs you nothing at renewal unless you are in a complex situation that requires a fee. They are particularly valuable when your financial circumstances have changed since your original mortgage — self-employment, a new job, reduced income, or a change in property use can affect which lenders will work with you and at what rate. A broker who specializes in renewals can identify the best path before you commit.

• Choosing the Right Term at Renewal

The 5-year fixed rate is Canada's most popular mortgage term for good reason: it provides payment certainty, and historically the 5-year fixed has often been competitive with variable rates on a risk-adjusted basis. But the right term at renewal depends on your specific circumstances. If you are confident rates will fall over the next two to three years, a shorter fixed term (1, 2, or 3 years) or a variable-rate mortgage positions you to renew into lower rates sooner. If you are planning to sell within three to four years, a shorter term avoids the penalty exposure of breaking a 5-year fixed partway through. Variable-rate mortgages have lower penalties (typically three months' interest) and can suit borrowers who might need to break early.

• The Amortization Trap at Renewal

When switching lenders at renewal, the new lender will base your mortgage on your remaining amortization — not a fresh 25 years. If you are 5 years into a 25-year amortization, your new mortgage should be for the remaining 20 years. Some lenders and some brokers suggest resetting to a new 25-year amortization, which lowers your monthly payment but significantly increases the total interest you pay over the life of the mortgage. Resetting makes sense only in rare circumstances: a genuine cash flow emergency, a plan to make large prepayments that will effectively compensate for the longer horizon, or a deliberate strategy to free up capital for higher-returning investments. In most cases, maintaining your remaining amortization is the financially responsible path.

• Before You Sign Your Renewal

• ✅ Set a calendar reminder 120 days before your mortgage maturity date
• ✅ Pull competing rate quotes from at least two to three lenders or use a broker
• ✅ Compare not just rates but prepayment privileges, portability, and penalty calculation methods
• ✅ Call your current lender's retention team with competing offers in hand
• ✅ Confirm whether the renewal maintains your existing amortization schedule or resets it
• ✅ Choose your term based on your timeline, rate outlook, and likelihood of needing to break early
• ✅ Sign only when you are confident you have found the best available offer for your situation

• Start Here

Note your mortgage maturity date and put a reminder in your calendar for exactly 120 days before it. That date is when the renewal process begins — not when the letter arrives in the mail. Starting early is the single most effective thing you can do to improve your renewal outcome.