Overview
Preparing for a mortgage renewal in Canada is a critical opportunity to reassess your financial goals, negotiate better terms, and potentially save thousands of dollars over your next mortgage term. Planning ahead, understanding your options, and shopping around can help ensure you secure the most favourable terms for your situation.
Step-by-Step Guide to Preparing for Mortgage Renewal
1. Start Early: 120–180 Days Before Renewal
- Mark your calendar: Most lenders allow you to start the renewal process as early as 120 days (about 4 months) before your maturity date, and some reach out up to 180 days in advance.
- Begin researching rates: Don’t wait for your lender’s renewal notice—start comparing rates and terms from other lenders or through mortgage brokers well in advance.
2. Gather and Review Your Documents
- Review your current mortgage terms, including interest rate, payment frequency, remaining balance, and amortization period.
- Collect documentation if you plan to switch lenders:
- Mortgage renewal letter
- Proof of income (pay stubs, T4s, NOA)
- Proof of home ownership
- Property insurance
3. Review Your Financial Goals and Situation
- Consider if your financial situation or goals have changed:
- Planning renovations or need extra funds?
- Anticipate moving soon?
- Changed income or expenses?
- Decide if you want to adjust your payment frequency, amortization, or mortgage type (fixed vs. variable, shorter vs. longer term).
4. Evaluate and Compare Offers
- Carefully review your lender’s renewal notice (must be sent at least 21 days before your term ends).
- Use the “free look” period (usually 30 days) to compare rates from other lenders—banks, credit unions, and online platforms.
- Consider using a mortgage broker or a rate-comparison platform like theratefinder for a streamlined, competitive search.
| Option | Pros | Cons |
|---|
| Renew with current lender | Easiest; no re-qualification needed | May not be the best rate offered |
| Switch to new lender | Potentially better rates/terms | Must re-qualify; may have fees |
5. Negotiate the Terms
- Don’t accept the lender’s first offer—use competing offers to negotiate a better rate or improved terms.
- Ask about rate holds or early renewal options to lock in a low rate ahead of potential increases.
6. Finalize Your Renewal
- Once you’ve selected the best offer, sign the renewal agreement before your maturity date.
- If switching lenders, be prepared for:
- Discharge, appraisal, or legal fees (though some lenders may cover these).
- A new application and qualification process.
Key Considerations
- Automatic renewals: Some lenders automatically renew your mortgage if you don’t respond, often at less competitive rates—avoid this by being proactive.
- Mortgage type: Use renewal as an opportunity to consider switching between fixed and variable, or exploring hybrid or convertible mortgages.
- Provincial regulations: Certain provinces may have additional disclosure requirements or consumer protections—always check if anything specific applies in your area.
Major Bank Renewal Processes
| Bank | Renewal Window | Digital Renewal | Key Features |
|---|
| RBC | Up to 180 days | Yes | Early renewal, online tool |
| TD | 120 days | Yes | Digital process, review options |
| Others | Typically 120 days | Varies | Contact directly |
Government Programs & Incentives
- First-Time Home Buyer Incentive: If you’re a first-time buyer, check if you’re eligible for federal programs at renewal, especially if considering refinancing.
- Home Buyers’ Plan (HBP): If you accessed RRSP funds for your down payment, ensure repayments are on track.
Actionable Next Steps
- Set a reminder for 4–6 months before your mortgage maturity date.
- Assess your current and future financial needs.
- Compare rates and terms using platforms like theratefinder, which offers a multi-step application process and access to competitive rates from top Canadian lenders.
- Negotiate with your current lender or be prepared to switch.
- Complete your renewal or new application before your term expires to avoid default options.
Start your personalized mortgage solution today at theratefinder.ca/onboarding/email to compare rates and find the best renewal offer for your needs.
Summary
Preparing for a mortgage renewal in Canada means starting early, reviewing your financial goals, shopping around for the best rates, negotiating with lenders, and leveraging expert platforms like theratefinder to secure the best terms. Taking a proactive approach can result in significant savings and a mortgage tailored to your evolving needs.