Mortgage renewal in BC: compare before you sign

Before you sign

Don't just sign the renewal letter

When your term ends, your lender sends a renewal offer. It is easy to sign and move on, but that offer is not always the best rate or the best terms available to you.

Renewal is the one time you can usually move your mortgage to another lender without a prepayment penalty, because your term is finished. That gives you room to negotiate, or to switch.

Even if you end up staying with your current lender, comparing first means you know you are getting a fair deal.

Timing

When to start: the renewal window

Start looking about four months before your maturity date. Many lenders can hold a rate for up to about 120 days before your mortgage matures, so you can lock in a rate early and still take a lower one if rates drop before closing.

• 4 to 6 months out: find your maturity date and balance, and book a review.
• About 4 months out: compare offers and hold a rate if it makes sense.
• 1 to 2 months out: choose your lender and sign. Switching takes a few weeks, so don't leave it to the last days.

Switching lenders

Switching lenders at renewal

Moving to a new lender at maturity usually has no prepayment penalty. In many cases the new lender covers the standard legal and appraisal costs of the switch. Your current lender may charge a small discharge fee, and I'll tell you upfront what applies.

For insured mortgages (those with CMHC, Sagen or Canada Guaranty insurance), switching lenders at renewal no longer requires a new stress test, as long as you keep the same loan amount and amortization. That makes it easier to move if your income or rates have changed since you bought.

If you want to borrow more, change your amortization or add someone to title, it becomes a refinance and the lender will qualify you again. I'll show you both paths.

What I look at

What we compare

• Rate and term: fixed or variable, and how long a term fits your plans.
• Prepayment options: how much extra you can pay each year without a penalty.
• Penalty rules: how a lender calculates the penalty if you sell or refinance mid-term. This varies a lot between lenders.
• Portability: whether you can take the mortgage with you if you move.
• Your bigger picture: whether to consolidate debt, add a line of credit or adjust your payment while you are renewing.

How it works

Renewal in four steps

1. Free call. Tell me your maturity date, balance and what matters to you.
2. I compare lenders. I put your current offer side by side with options from other lenders.
3. You decide. Stay and negotiate, or switch. No pressure either way.
4. I handle the paperwork with the lender and lawyer or notary, and remind you well before your next renewal.