Mortgage Renewals: Don’t Just Sign the Bank’s Offer

Your lender mails you a renewal letter a few months before your term ends, with a rate and a signature line. It feels easy, and that’s the point. That first offer is rarely the best rate they’d give you, and it’s almost never the best rate on the market.

Quick answer: At renewal you owe your lender nothing to leave. When your term matures you can move to a new lender with no prepayment penalty, and since November 2024 uninsured borrowers doing a straight switch at renewal are no longer re-stress-tested. Start shopping about 120 days before your maturity date so you have time to compare and, if it pays, switch. A broker re-shops 30+ lenders and handles the switch paperwork for you.

120

days out to start shopping

penalty to switch at maturity

30+

lenders a broker re-shops

Nov 2024

no re-stress-test on straight switches

Why the mailed offer is rarely the best rate

Banks price renewals on inertia. Most people sign because it’s the path of least resistance, so the opening number is set high enough to protect the lender’s margin. If you call and push, you’ll often get a better rate than the letter, which tells you the first offer was never their floor. And even their best number only reflects what one lender will do. A broker compares that against the whole market, including monoline lenders you can’t walk into.

At maturity you can leave with no penalty

The scary part of leaving a lender mid-term is the prepayment penalty. That penalty exists to compensate the lender for breaking a term early. At your maturity date the term is over, so there’s nothing to break and no penalty to pay. This is the one moment in your mortgage where you have full freedom to move without a cost, and it’s exactly why lenders make renewal so frictionless. Use that freedom before you sign.

Switching is easier since November 2024

Switching used to mean re-qualifying under the federal stress test at another lender, which could trap borrowers who no longer passed. That changed in November 2024. If you have an uninsured mortgage and you’re doing a straight switch at renewal (same balance, no new money, keeping the amortization), the new lender no longer has to re-apply the stress test. Practically, that means moving for a better rate is now open to far more people than it used to be.

Renew where you are vs. switch lenders

	Sign the renewal offer	Switch lenders at maturity
Rate	Whatever they offer first	Best of 30+ lenders
Penalty	None	None (term has matured)
Stress test	None	None on an uninsured straight switch (since Nov 2024)
Paperwork	Sign and return	Broker handles the switch
Effort for you	Low	Low — the broker does the legwork

Start shopping about 120 days out

Give yourself runway. Around 120 days before your maturity date, most lenders will let you hold a rate, which protects you if rates climb while you decide. It also leaves time to gather documents, compare offers, and complete a switch cleanly before your current term ends. Wait until the last week and you’ll be rushed into signing whatever’s in front of you — which is exactly what the bank is counting on.

How a Calgary mortgage broker helps

Re-shops your renewal across 30+ lenders, including monolines you can’t get on your own
Tells you honestly whether staying put or switching actually saves you money after any costs
Handles the switch paperwork so moving lenders is as easy as signing the bank’s letter
Times the rate hold so you’re protected if rates rise before your maturity date
It’s free, with no credit hit to start and no obligation.

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Frequently asked questions

When should I start shopping my mortgage renewal?

About 120 days before your maturity date. Most lenders will hold a rate for you around that window, which protects you if rates rise while you decide, and gives you time to compare offers and complete a switch before your current term ends.

Is there a penalty to switch lenders at renewal?

No. Prepayment penalties apply when you break a term early. At your maturity date the term has ended, so there’s nothing to break and no penalty to pay. This is the one point in your mortgage where you can move lenders at no cost.

Do I have to pass the stress test to switch lenders now?

Since November 2024, uninsured borrowers doing a straight switch at renewal — same balance, no new money, keeping the amortization — are no longer re-stress-tested by the new lender. That makes moving for a better rate available to far more people than before.

Is the bank’s mailed renewal rate their best rate?

Usually not. Renewal offers are priced on the assumption that most people just sign. If you push, you’ll often get a lower rate than the letter, and even their best number only reflects one lender. A broker compares it against 30+ lenders to see if you can do better.

What paperwork is involved in switching lenders at renewal?

A switch is lighter than a new purchase or refinance: it moves your existing balance to a new lender at a better rate. Your broker handles the application and the switch documents with the new lender, so for you it’s about as much effort as signing the bank’s renewal letter.

Does shopping my renewal hurt my credit?

Getting started with a broker involves no credit check, so there’s no hit to explore your options. A credit check only happens later, once you decide to move forward with an application.

Your renewal is a chance to save — take it

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This article is general information, not financial, mortgage or legal advice. Rates, programs and rules change and depend on approval. Please speak with a licensed mortgage professional about your situation. Mortgages for Less with INDI Mortgage.