Most people don’t think about their mortgage until the renewal letter shows up. That letter usually arrives about 30 days before your term ends, with a rate that looks fine, a short list of options, and a deadline. Most people sign it.
I get it. The letter is from your bank. You’ve been with them for years. The rate looks reasonable next to “nothing else.” There’s no obvious reason to do anything different.
The problem is that by the time the letter shows up, you’ve already lost most of your leverage. Your bank knows the math. They know it costs you something real to move — paperwork, an appraisal, the slight hassle of pulling statements together. They build that cost into the rate they offer you. The renewal rate isn’t the best rate they have. It’s the rate they think you’ll accept.
The fix isn’t complicated. It’s just timing.
Why six months out
A mortgage rate hold lasts up to 120 days at most lenders. That means I can lock in today’s rate for you, for up to four months, while we look at whether it makes sense to switch when your term ends.
If rates drop during those four months, most lenders will float you down to the lower rate. If rates rise, you’ve already locked in the lower one. There’s no downside to holding a rate. There’s a real downside to not holding one and finding out three weeks before your renewal that rates have moved against you.
Six months before your renewal gives me two months to get the lay of the land — pull your situation together, run scenarios, talk to a few lenders about what they’d offer — and then four months of rate-hold cushion to make the move. By the time your renewal letter shows up at the 30-day mark, you already know your options.
The three numbers that actually matter
When your renewal letter arrives, you’ll see a rate. That rate is one of three numbers I want my clients to know before they make a decision.
Your bank’s renewal rate. Whatever the letter offers. This is the floor — what you’d pay by doing nothing.
Your bank’s actual best rate. This is almost always lower than what’s on the letter. Banks have discretion on renewal rates. They use it when clients push back, and they use it more when clients have a competing offer in hand. I’ve seen renewal rates drop 0.4% in a single phone call once the client said the words “I have a better offer from a broker.”
The market rate from other lenders. This is what an agent like me can shop for across the actual marketplace — not just the big banks, but monoline lenders, credit unions, and specialty options depending on your situation. Sometimes the market rate is lower than your bank’s best. Sometimes it isn’t. The point is you don’t know unless someone checks.
If your bank’s renewal rate is 4.79%, their actual best rate might be 4.49%, and the market rate might be 4.35%. The difference between sleepwalking through your renewal and putting in 30 minutes of effort is usually a few hundred dollars a month. Over a five-year term, that’s real money.
What I’d want to know about your situation
If we sat down six months before your renewal, here’s what I’d want to understand before recommending anything:
- Your current rate, term, and balance
- How long you plan to stay in the house
- Whether your income or family situation has changed since you got the original mortgage
- Whether you have any high-interest debt that could be folded into a refinance instead of just renewing
- Whether your property has appreciated significantly (this changes your loan-to-value ratio and opens up options)
The renewal decision often isn’t actually about renewing. About a third of the time, when I look at someone’s full picture, the better move is to refinance instead. Pull some of the equity, pay off a line of credit or a car loan that’s costing you 8%, 9%, or sometimes more, and end up with a smaller monthly outlay even after the slightly higher mortgage balance. Most people never explore that because their bank doesn’t volunteer the option.
The conversation that doesn’t cost anything
Here’s the part most people don’t realize: looking at your renewal options doesn’t cost you anything. I don’t charge clients for the work. I get paid by the lender when a mortgage closes. If we look at your situation and decide the best move is to stay with your bank at whatever rate they’re offering — no problem. You’ve still won, because now you actually know.
What it does cost you, if anyone, is a few minutes pulling together your current mortgage statement and a recent pay stub. That’s it.
What to do this week
If your mortgage is renewing in the next six to twelve months, the best thing you can do today is dig up your renewal date and your current rate. That’s the starting line.
If you’re closer than six months out, it’s not too late — most of this still applies, just with less rate-hold cushion. Even at 30 days out, you have more options than the letter suggests.
If you’d rather have someone else do the work of figuring out where you stand, book a 15-minute call and we’ll look at it together.
Alex Jodoin is a Level 1 mortgage agent with Mortgage Alliance, serving clients across Canada except Quebec. He’s been an agent since 2017 and worked previously at CIBC and TD. He lives in Stittsville with his family and coaches soccer at West Ottawa Soccer Club.