4 Steps to prepare for your mortgage renewal

Here's the steps I took when I renewed my mortgage in May 2025.

I'd like to start by highlight the importance of getting a competitive rate. To illustrate how a small changes in interest rate impacts your total cost. Lets take an example for a typical house in North Bay, ON of $400k on a 25 year mortgage with 20% down leaving a mortgage of $320k.

As of May 2025 the big banks advertise about 4.5% for a 5 year fixed term and they have personal offers available as low as about 4%.

I'm going to compare a 4.5% rate vs 4% to demonstrate how much negotiating 0.5% can save you.

320,000 at 4.5% over 25 years would give you total payments of $506,723

320,000 at 4% over 25 years would give you total payments of $533,599

Reducing the rate by 0.5% equals a savings of $26,876! You'll have to re negotiate this every 5 years but with the amount of savings it can give, it's absolutely worth doing.

 

Now that you understand how important getting a good rate is, here are some steps you can take to help you negotiate and ensure you get a competitive rate.

1. Start early, set a reminder today! 

• Financial institutions provide a rate hold on a quote for 120 days. Find out your exact renewal date, count back 4 months and set a reminder in your calendar.

 

2. When you get your reminder notification, call your current lender as soon as possible and get a quote!

• Ask if they can do better, tell them you think the offer is good but since you're a valuable customer you want better.

• Ask what fees and costs are associated with discharging your mortgage to be able to change lenders.

• This is a great starting point, you've got a quote and lots of time to negotiate.

 

3. Shop around!

• The easiest way to do this is call a mortgage broker, it's FREE and they'll only do 1 credit check and present you with multiple offers from different institutions.

• Remember to let your broker know about your existing amortization period, any applicable discharge fees, ask if the new lender has any set up fees like an appraisal fee and which fees they cover for doing the switch. (Usually the new lender will cover most fees to switch)

• Spending a bit of time with a mortgage broker will give you a LOT of information about rates available to you, they get paid a commission by the new institution so these guys will work hard to get the best possible offer.

• You do not have to accept any offers! Do thank them for all the hard work and say you need time to think about it.

 

4. Make a decision!

• Congratulations! Now you're an educated consumer! Compare the offers and see if your renewal offer is a good one.

• Negotiate with your current lender again, with all the new knowledge you have. Let them know if you found a better rate and tell them they need to beat it to retain your business.

 

 

Extra Tips:

• Check your credit score, you'll want at least 700+ and preferably 750+ to ensure you have access to the best rates

• Do NOT extend your amortization period! If there's 15 years left on your current mortgage make sure the offer from a new lender keeps this period the same. Lower monthly payments might sound really tempting but it'll cost you a lot in extra interest. DON'T do it! Think about how good it'll feel when your mortgage is paid off!

• Ideally your current lender will give you a good renewal offer but often the best offers are for new clients so switching lenders is worth considering.

• Remember rates posted online are rarely the best rates available, there's many offers that are not publicly advertised.

• Do NOT be rude to the person you're speaking to! You want this person to help you. Don't be a Karen.

• Be appreciative while objecting to the offer, something along the lines of: "I really appreciate that you're helping me with this, your offer's good however I've been a loyal customer and banking with you for over 20 years and this quote is not competitive with the rates offered by your competitors. It'd be really unfortunate if I had to transfer my services to another bank to get a competitive rate. Is there anyway that we can get to a better rate?"

• Feel free to respectfully object multiple times, they want your business, make them work for it!

• To get an idea of current competitive rates check out: Ratehub's 5 year fixed rates in Canada, you can also check out this thread: Red Flag Deal's Mortgage Rate Thread

• Remember the absolute lowest rate is not always the best, you want to keep in mind your needs and features like a HELOC, pre payment options and any fees or penalties if you have to discharge your mortgage early.

• Personally I prefer fixed rate over variable for the peace of mind of knowing what my mortgage payments will be during the entire term. Variable rates will change based on a lender's prime rate and with the current economic volatility, that's not something I want to worry about.