Tips to get Better Mortgage Renewal Rates

March 27, 2025 | Posted by: Sarabjit Dhuna

Negotiating your mortgage renewal in Canada can save you money in the long run. Here are some tips to help you get the best deal:

1. Start Early

Don’t wait until the last minute. Mortgage renewal offers usually come 3-4 months before the end of your current term. Starting early gives you ample time to shop around and negotiate.

2. Review Your Current Mortgage Terms

Understand your current deal: Look at your interest rate, any penalties for breaking the mortgage, prepayment privileges, and any other conditions. This will help you identify areas that could be improved in your new agreement.

3. Shop Around

Get quotes from multiple lenders: Even if you're happy with your current lender, it’s wise to see what others are offering. Rates can vary significantly across lenders.
Consider mortgage brokers: Mortgage brokers can help you find competitive rates and terms. They work with various lenders, including those that don't advertise widely.

4. Know Your Credit Score

Check your credit score: A higher credit score can help you negotiate a better interest rate. If your score has improved, you might be eligible for lower rates, even if you were previously locked into a higher one.

5. Consider Your Needs and Future Plans

Assess your financial goals: Do you want to pay off your mortgage faster, or are you looking for lower monthly payments? This will help determine if you should negotiate a lower rate, a shorter term, or more flexibility.
Prepayment options: Ensure you can make extra payments without penalties. This could be useful if you want to pay off your mortgage faster.

6. Leverage Your Loyalty

Ask for a loyalty discount: If you’ve been with your lender for a while, they may offer a better rate to keep your business. Don't be afraid to mention that you're considering leaving for a better offer.
Ask about other incentives: Some banks may offer incentives like cashback, mortgage portability, or reduced fees if you renew with them.

7. Negotiate the Rate

Ask for a lower rate: Don’t accept the first offer. Mortgage rates fluctuate, so even if your bank offers a standard rate, you may be able to negotiate a better deal.
Negotiate other terms: If the rate is non-negotiable, ask for perks like lower fees, more flexible payment terms, or higher prepayment limits.

8. Consider Switching Lenders

Weigh the costs of switching: If you're not happy with your current lender’s offer, it may be worth switching. Ensure that the savings from a better rate outweigh any fees associated with breaking your mortgage early.
Look for portability options: Some mortgages allow you to transfer the mortgage to a new property without penalties, which could be a big advantage if you're planning to move.

9. Understand the Impact of Fixed vs. Variable Rates

Fixed-rate mortgage: Offers stability, but make sure the rate aligns with your long-term financial goals.
Variable-rate mortgage: May offer a lower initial rate, but it fluctuates with market conditions. Consider your risk tolerance before choosing this option.

10. Get Everything in Writing

Document the agreement: Make sure all terms and conditions are clearly written in your mortgage renewal contract, including the interest rate, term length, and any special provisions.

By following these tips, you can ensure that you're in the best possible position when negotiating your mortgage renewal.

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