Getting the best deal on your mortgage renewal

Getting the best deal on your mortgage renewal

Mortgages remain the most expensive investment Canadian mortgage holders make, and 30% of homeowners automatically renew their mortgage terms without seeking other options according to a study by Angus Reid.  While it sounds complicated, a mortgage renewal entails taking the balance of your current mortgage and extends or renews the mortgage on another term at a newer rate. This means you do have options and should take them.


As it stands, renewing your mortgage is important, but you can (and should) shop around once renewal time comes around. A broker or competitor bank may offer a lower interest rate or better financing terms if you ask.


Asking about getting a better deal can save you money in the process.  And let’s face it: who doesn’t want to save hundreds, or even thousands, on their mortgage?


Here are some tips for you to consider when negotiating your next mortgage renewal.


Avoid settling for your first offer


Your current financial institution sends you mortgage renewal papers in the mail. What do you do?  If your first instinct involves briefly skimming over the details, signing the documents and mailing them back, you might be positioning yourself at a financial  disadvantage.  


First thing’s first: don’t sign those renewal papers.


Lenders typically don’t expect their clients to negotiate better deals. Your lender won’t offer a beneficial rate in your statement and expect you to settle for the posted rate.

But you’re smarter than that.


A proactive way to approach your mortgage is simple: shop around and get many different quotes. A banking competitor could offer you perks that your current one doesn’t, such as covering your mortgage transfer fee.


Contacting a broker or taking your current offer to a few competitors and inquiring about promotional offers gives you an upper hand. If possible, get quotes from competing providers and take them to your current lender.  Given how competitive the financial services market is, your lender will likely budge.


And if they don’t? You’ve got other options.


Side note: If your mortgage payment and credit rating history with your current lender is strong, using your credibility can leverage a better deal if you decide to stay or leave.


Start shopping early


In Canada, mortgage renewal statements are legally required to be sent a minimum of 21 days before a mortgage term expires. However, you can start searching for a new mortgage renewal package well before this time arrives(three to six months works best).


If you’re planning to switch to a new lender, bear in mind that they’ll need at least 10-14 business days to arrange and fund your new mortgage. Some may even require property appraisal documents, a copy of your title and deed, and other documents.


You should also consider the time it takes to schedule meetings, gather and send  documents, and manage processing times. Being an early bird when shopping for a mortgage renewal is a good thing.  


Consider transfer fees


Most financial institutions in Canada charge various incoming and outgoing fees for transferring a mortgage from one bank to another.  These fees are usually a combination of set-up fees (to a new institution), appraisal fees, legal and administration fees, and transfer fees. Expect to pay several hundreds of dollars


Depending on where you plan to transfer your mortgage, you could have your transfer/discharge fees covered.


Negotiate other aspects of your mortgage terms


In addition to considering an interest rate that matches your financial situation, think about changing other aspects during your mortgage renewal.


Renegotiating factors such as your amortization period, the flexibility or frequency of payments, porting options, and rate types(fixed vs. variable) can affect how you make monthly payments. In turn, allow you to get the best deal on your mortgage renewal.


Let us at Loanerr help you in getting the best deal on your mortgage renewal!



Loanerr is a financial technology company aimed at providing tools to effectively manage debt. Whether its credit cards, lines of credit personal loans, mortgages or car loans - we won't just leave you a loan.