Three options at renewal
Renew with your current lender. This is the simplest path. You sign the renewal letter and continue with a new term. No additional documentation or approval required — not even a credit check. The downside: your lender's renewal rate may not be competitive because they are counting on inertia. Studies show that existing customers are offered rates 0.2-0.5% higher than what a new customer would receive for the same mortgage.
Switch to a new lender. Moving your mortgage to a different lender can save $100-300 per month depending on the rate difference and mortgage size. New lenders often offer lower rates and cash incentives — typically $1,000-3,000 — to win your business. The trade-off: you will need to requalify with income verification and pay switch costs (legal fees, discharge fee) that the new lender may cover or reimburse. Most lenders offer "switch programs" that cover up to $1,500 in fees.
Refinance. If you need to access equity, consolidate debt, or change amortization, a refinance replaces your mortgage with a new one at a different balance or structure. This is the right choice when you need more than a rate change. Refinancing involves full qualification, an appraisal, and legal costs, but can be the most financially impactful option if you have built significant equity or have high-interest debt to consolidate.
When to start planning
Ideally, start reviewing your options 4-6 months before your term ends. This gives time to compare offers from multiple lenders, negotiate with your current lender, and complete a switch if it makes sense. Last-minute renewals leave you with fewer options because most lenders need 30-60 days to process a switch. Your renewal letter typically arrives 30-45 days before maturity — by then, your best options may have already passed if you are planning to switch.
The true cost of not shopping around
Consider a $400,000 mortgage renewing from a 2.5% rate to a lender's offered renewal rate of 5.5%. If the best available rate from another lender is 4.9%, the difference of 0.6% represents $2,400 per year — or $12,000 over a 5-year term. Even after accounting for switching costs of $800-1,500, the net savings are substantial. Over multiple renewal cycles, the compounding effect of consistently getting the best available rate can amount to $50,000-80,000 over the life of a mortgage.
Renegotiating with your current lender
Your current lender does not want to lose you. If you receive a better offer from another lender, your current lender may match or beat it. The key is having that conversation before you sign the renewal letter. Lenders have internal retention teams with rate discretion that is not available through standard renewal offers. A broker can help facilitate this negotiation by bringing competing offers to your current lender. Even without a competing offer, simply asking for a better rate and mentioning you are exploring other options often results in an improved offer.
What to do if you cannot qualify at renewal
If your financial situation has changed and you cannot qualify at renewal with a new lender, renewing with your current lender is almost always an option. Since renewals do not require requalification, your current lender will typically renew you regardless of changes in income, credit, or debt levels. This is a significant safety net — but it also means you could be stuck at a higher rate if your situation has deteriorated. If you anticipate qualification challenges, start the conversation with your broker early to explore options before you are limited to renewal only.
Preparation checklist for renewal
Get your renewal documents ready 4-6 months before maturity: current mortgage statement showing balance and payment history, recent pay stubs or tax returns (if switching), confirmation of property value (online estimate or recent appraisal), list of competing offers you have received, and your desired rate and term preferences. A broker can handle most of this process on your behalf and present you with options from multiple lenders.
