Your Mortgage Is Expiring or Your Debt is Growing? Stop and Run the Math First.

Renewal Questions We Actually Get Asked

My bank sent me a renewal letter with a rate. Should I just sign it?

Not before comparing it, and here’s the honest reason why: the renewal letter is priced for people who sign without asking. Lenders know that most borrowers stay put at renewal, so the first offer is rarely their best one. It’s not a scam, it’s just how the incentives work. The customer they might lose gets sharper pricing than the customer they assume they’ll keep. Signing the letter is the easiest option and the most expensive one. Even a quarter point on a typical BC mortgage balance adds up to thousands of dollars over a five year term. The letter usually arrives looking like a deadline. It isn’t. It’s an opening offer.

Is there a penalty for leaving my lender at renewal?

No. This is the single most common misunderstanding we hear, and it stops people from ever looking around. Penalties apply when you break a mortgage in the middle of its term. At maturity, the contract is simply over. You are free to renew, switch lenders, or restructure entirely, with no penalty of any kind. The renewal window is the one moment in your mortgage’s life when moving costs you nothing in penalties, which is exactly why it’s worth treating as a decision rather than a formality.

Do I have to pass the stress test again if I switch lenders?

Generally not anymore, and this changed more recently than most people realize. For years, switching lenders at renewal meant requalifying under the federal stress test while staying with your existing lender required nothing. That trapped a lot of households with their current lender even when better pricing existed elsewhere. The rules changed in late 2024: a straight switch at renewal, meaning the same balance and the same amortization moving to a new lender, no longer requires passing the stress test again. If you want to change the mortgage itself, such as borrowing additional funds or extending the amortization, that’s a different transaction and full qualification applies. But a clean switch for a better rate is now far easier than it used to be.

What does it actually cost to switch lenders at renewal?

Usually very little, and often nothing out of pocket. The typical costs on a switch are an appraisal, a discharge fee from your departing lender, and legal or transfer fees. On a standard file, the new lender commonly covers the transfer costs or allows small fees to be rolled in, because they want the business. Your departing lender’s discharge fee is usually a few hundred dollars. The practical arithmetic: modest one time costs on one side, and five years of a sharper rate on the other. We run the actual numbers on your actual balance before recommending anything, because occasionally staying put genuinely is the right answer, and you deserve to know which situation you’re in.

When should I start working on my renewal?

120 days before your maturity date. That’s not an arbitrary number, it’s the longest rate hold most lenders offer. Starting at 120 days means we can lock today’s pricing as a floor. If rates fall before your maturity date, you take the better number. If they rise, you’re protected at the held rate. Starting two weeks before maturity means no hold, no leverage, and usually no time to switch even if the numbers say you should. This is exactly why we build a rate defense for our clients at the 120 day mark rather than waiting for the bank’s letter to arrive.

Can I use my renewal to deal with credit card or line of credit debt?

Often yes, and renewal is frequently the cheapest moment to do it. Because there’s no penalty at maturity, restructuring your mortgage to consolidate high interest debt costs less at renewal than at any other point in the term. Rolling debt that carries high double digit interest into a mortgage rate can meaningfully lower your total monthly outlay and free up household cash flow. Two honest caveats. First, this is new borrowing, so full qualification and the stress test apply. Second, consolidation only works if the freed up cash flow doesn’t quietly rebuild the same balances. We’ll tell you plainly whether the math works for your situation, and the tax side of any restructuring is always a question for your accountant.

My income has dropped since I got my mortgage. Am I stuck at renewal?

You have more room than you think, and one protection worth knowing about. Your existing lender must offer you a renewal if your payments are current. They do not requalify you to stay. So even in a hard season, you are not losing the mortgage at maturity. Whether you can switch for better pricing depends on the file, and since a straight switch no longer requires the stress test, a changed income picture closes fewer doors than it did a few years ago. If money is tight, the worst move is silence until maturity week. The earlier we see the picture, the more options exist, from payment restructuring to amortization adjustments. This conversation happens by phone, and nothing about it obligates you to anything.

Should I take a fixed or variable rate this time?

The honest answer is that it depends on your cash flow, your plans, and your tolerance for movement, not on anyone’s rate prediction, including ours. What we can tell you is how to frame it. A fixed rate buys certainty and charges for it. A variable rate historically costs less over full market cycles but moves with the market in between, and it carries a much smaller penalty if your life changes mid term. Most of the mortgages we manage are variable, but that reflects our clients’ situations after the analysis, not a house rule. The right answer falls out of your numbers, and that’s a conversation, not a form letter.

How far before my renewal will you contact me?

Renewal planning starts twelve months before maturity, with a strategy conversation no later than six months out. You will not be waiting on a lender letter.

If I am in a variable rate, will you tell me when to lock in?

Not by phoning every client after every rate decision. That is not a promise anyone can keep. What we do is send every client our HappyChat rate synopsis after each Bank of Canada announcement, so you always know what changed and what we think it means for variable-rate holders.

When you want to look at the lock-in question for your own mortgage, book a strategy session and we run your numbers together. The decision is always yours.

What does ongoing mortgage management include?

Annual reviews, renewal planning a year in advance, monthly HomeBrew equity updates, a rate synopsis after every Bank of Canada announcement, penalty math before any prepayment or move, and one broker who knows your file for as long as you have a mortgage.