Mortgage renewal: why this isn’t the moment to say “yes” with your eyes closed

If you bought a home or refinanced between 2020 and 2021, there’s a very good chance your mortgage term is coming up for renewal soon — or has already expired.

You're not alone: economic media have been talking about it a lot in recent weeks, as a very large number of Canadian homeowners are renewing this year. This is called the "renewal wave," and it affects both new homeowners and those who have had their home for a long time.

Why this time is different

Many people signed their mortgage when interest rates were historically low. At renewal, market conditions have changed, and the monthly payment may be different from what was expected. It’s not a reason to panic, but it is certainly a good reason not to renew lightly.

The most common mistake

The vast majority of people receive a renewal letter from their bank, sign it, and send it off without asking questions. It’s human — we’re busy, we want things to be settled quickly. The problem is that this offer is rarely the best available on the market. Financial institutions know that most clients don’t shop around, and their renewal offers reflect that.

What to check before signing

Three simple things to keep in mind:

Is the offered rate comparable to what exists elsewhere on the market right now? A difference, even small, can add up to hundreds or even thousands of dollars over the term.

Does the term length match your plans? If you plan to sell, grow your family, or change your situation in the coming years, a shorter or more flexible term might suit you better than a default five-year term.

Are there penalties or hidden fees if you switch institutions? This is a question that’s often forgotten, and the answer can make all the difference in your decision.

The right time to act

The ideal is to start shopping about three to four months before your term expires. It gives you time to compare options without pressure, and it helps you avoid being stuck with your bank’s automatic renewal because the deadline has passed.

You don’t have to do this alone

This is exactly the kind of situation where a mortgage broker can make a real difference: I shop around for you with several institutions, compare options based on your actual situation, and it costs you nothing extra. The goal is for you to make an informed decision rather than a default one.

If your renewal is approaching — even if it’s only in a few months — now is the right time to talk.

Write to me, and we’ll look at this together, with no obligation.