Your Bank Just Sent You a Renewal Offer.

Renewal happens at the end of your mortgage term. Your current contract expires, and you negotiate new terms, typically rate, term length, and payment structure, with no prepayment penalty. Refinancing replaces your mortgage before the term ends and usually involves accessing equity, restructuring the loan amount, or changing lenders mid-term. Refinancing outside of a renewal window triggers a prepayment penalty. Renewal does not.

If you stay with your current lender and are not increasing your loan amount or significantly extending your amortization, you typically do not need to requalify or pass the stress test again. If you switch lenders at renewal, the new lender will run a full application, including the stress test. This is an important factor when weighing whether switching is worth it, and one I walk through with every client before we start the process.

6 months before your term ends. Most lenders will send a renewal offer 30 to 120 days out. Starting early gives you time to compare rates, get a rate hold in place, and make a considered decision rather than a rushed one. Rate holds lock in a rate while you continue to compare; if rates drop further before you sign, you benefit. If they rise, you are protected.

An agent shops the full market on your behalf: banks, credit unions, monoline lenders, and others you may not have direct access to. Your current bank can only offer its own products. The value of a mortgage agent at renewal is not just the rate. It is knowing whether the rate your bank offered is actually competitive, what your alternatives look like, and whether the effort of switching is justified by the numbers. That analysis costs you nothing.

Yes. At renewal, there is no prepayment penalty. Your current term has ended and you are free to move your mortgage to a new lender. The new lender typically covers the transfer costs. The trade-off is that switching involves a new application and the stress test. Whether that is worth it depends on the rate difference and your qualifying picture.

You compare it. A reasonable-looking rate and a genuinely competitive rate are not always the same thing. Banks know that most customers will sign without benchmarking against the market. A 15-minute conversation with me will tell you whether what your bank sent is competitive, negotiable, or worth leaving. If the bank's offer is excellent, I will tell you to take it.

At renewal, you can change your interest rate, term length, rate type (fixed or variable), payment frequency, and lender, all without a prepayment penalty. You can also make a lump sum payment against your principal before signing into a new term, penalty-free. This is the most flexibility you will have at any point in your mortgage.

Yes, and this is one of the most underused opportunities in the renewal process. Before you sign a new term, you can pay down a portion of your principal with no penalty. If you have savings you want to put toward the mortgage, renewal is the cleanest time to do it. It reduces your balance going into the new term and can meaningfully change your payment or your amortization timeline.

Most lenders will automatically renew your mortgage into a short-term product, often at a higher rate with less favourable terms, if you take no action. The specific terms vary by lender. Letting a renewal expire without engaging is the most expensive version of the process. Starting 6 months out gives you time to avoid that entirely.

It comes down to two things: your outlook on where rates are heading and your tolerance for payment uncertainty. Fixed gives you a locked payment for the term: predictable, easy to budget around, higher prepayment penalty if you break early. Variable moves with the Bank of Canada's rate, historically lower over time, but with payment variability and lower penalties. I look at both options for every client in the context of their situation, not as a general recommendation.