When your mortgage term comes to an end, you’re faced with an important decision: do you renew with your current lender, or do you explore other options? This is where many homeowners in the Greater Toronto Area (GTA) make a critical mistake. Banks often bank on the fact that you’ll simply renew with them without shopping around—and it could cost you thousands of dollars. In this article, I'll share some insider tips to help you navigate the mortgage renewal process, save money, and ultimately secure a better deal. And yes, we'll also talk about how Mission 35 can make this journey smoother for you.
What Is Mortgage Renewal, and Why Should You Care?
Mortgage renewal is essentially the process of renegotiating the terms of your mortgage once your current term expires. If you’re like most Canadians, you signed up for a mortgage term ranging from 1 to 5 years. When that period is up, you have to decide whether to renew your mortgage with your current lender or shop around for a better deal.
Most people don’t think twice about renewing with their existing lender—it’s convenient, and they assume it’s the best option. But here’s the truth: banks often rely on this assumption, and they don’t always offer the best rates or terms during renewal. They know that the process can seem daunting, so they make it easy for you to stay put.
The Fine Print Banks Hope You Ignore
When it comes to mortgage renewals, the devil is in the details. Banks are notorious for slipping in clauses or conditions that can trip you up. Here are a few things they hope you won’t notice:
Hidden Fees and Penalties
Ever heard of a "reinvestment fee" or an "early renewal penalty"? These are just a couple of the sneaky charges banks might throw in if you decide to make changes to your mortgage during the renewal process. They may sound small, but they can add up quickly. It’s essential to read the fine print—or better yet, let someone like me at Mission 35 do it for you.
Interest Rate Tricks
Banks often advertise incredibly low rates, but these might not be the rates you actually qualify for. They’re designed to lure you in, but when it’s time to sign, you might be offered something much higher. It’s a classic bait-and-switch tactic. Plus, some rates come with restrictive terms that can be costly if you need to break your mortgage early.
Terms and Conditions
Sometimes, the terms of your mortgage renewal can change subtly, and not always in your favor. For instance, your lender might increase the penalties for early repayment or include conditions that limit your flexibility. This happened to a friend of mine who found out too late that her mortgage now required her to stay with the same lender for another five years or face a hefty penalty.
How to Prepare for Mortgage Renewal Like a Pro
The good news is that with a bit of preparation, you can avoid these pitfalls and come out ahead. Here’s how:
Start Early
You don’t have to wait until your mortgage term is up to start thinking about renewal. In fact, I recommend starting 4-6 months before your term ends. This gives you plenty of time to explore your options, compare rates, and negotiate better terms. When you’re proactive, you’re in control.
Shop Around
This is where many people get stuck. It’s easy to just renew with your current lender, but by shopping around, you can often find a better deal. Mortgage brokers, like those of us at Mission
35, have access to a wide range of lenders and products that aren’t available directly to consumers. We can help you compare rates and find the one that’s right for you.
When I first started working with Mission 35, I was blown away by how many options were out there that I’d never heard of. And I’ve seen it time and time again with clients—they’re amazed at how much they can save by simply looking beyond their bank.
Understand Your Current Mortgage
Before you start negotiating, it’s crucial to fully understand the terms of your current mortgage. Review your interest rate, remaining balance, and any penalties for breaking the mortgage early. This will give you a solid foundation for negotiations and help you determine whether it’s worth sticking with your current lender or switching to a new one.
Negotiation Tactics That Could Save You Thousands
Negotiating your mortgage renewal can be intimidating, but it doesn’t have to be. Here are some strategies that can help you get the best deal possible:
Leverage Your Loyalty
If you’ve been with your current lender for a while, you might be able to use that to your advantage. Banks don’t want to lose customers, so they might be willing to offer you a better rate or waive certain fees if you bring up the possibility of switching lenders. It’s all about being assertive and knowing your worth.
Consider Fixed vs. Variable Rates
Whether to choose a fixed or variable rate is one of the biggest decisions you’ll make during your mortgage renewal. Fixed rates offer stability, which can be appealing, especially if you’re on a tight budget. Variable rates, on the other hand, can save you money if interest rates stay low, but they come with more risk.
At Mission 35, we help our clients weigh the pros and cons of each option based on their unique situation. One of my clients, a young couple in Mississauga, saved a significant amount by choosing a variable rate after we determined it was the best fit for their financial goals.
Alternatives to Traditional Renewal
Sometimes, the best option is not to renew at all, at least not in the traditional sense. Here are some alternatives to consider:
Refinancing Options
Mortgage renewal can be an excellent opportunity to refinance. If you have high-interest debt or need to access equity for home renovations, refinancing can consolidate your debt into a single, lower-interest payment. Just make sure you fully understand the implications before making this decision.
Mortgage Portability
If you’re planning to move in the near future, consider whether your mortgage is portable. Mortgage portability allows you to transfer your existing mortgage to a new property, potentially saving you from having to break your mortgage and pay penalties. This option can provide flexibility if your living situation is likely to change.
Real-Life Case Studies: The Good and the Bad
Let’s take a look at two real-life examples to illustrate how important it is to approach mortgage renewal strategically.
Success Story: The Smart Shopper
A client of mine,, was renewing her mortgage for the first time. She initially thought about sticking with her bank, but after we reviewed her options, she decided to shop around. We found a lender offering a rate 0.75% lower than her bank’s renewal offer. By switching, she saved over $10,000 over the life of her mortgage.
Cautionary Tale: The Missed Opportunity
On the other hand, my neighbor, didn’t bother to shop around when his mortgage came up for renewal. He assumed his bank was offering him the best deal. A few months later, he found out that other lenders were offering much lower rates. Unfortunately, by then, it was too late—he was locked into a higher rate for the next five years.
How to Get Started with Your Mortgage Renewal
If your mortgage is coming up for renewal, don’t make the mistake of just signing the renewal offer your bank sends you. Take control of the process by starting early, shopping around, and negotiating for the best possible terms.
At Mission 35, we’re here to help you through every step of the renewal process. Whether you’re looking to switch lenders, refinance, or simply ensure you’re getting the best deal, we can provide the expert guidance you need. And if you’re not sure where to start, why not take advantage of a free consultation? We’ll review your current mortgage, explore your options, and help you make an informed decision.
Mortgage renewal is a critical financial decision, and it’s one that shouldn’t be taken lightly. By understanding the process, knowing what to look out for, and working with experts like those of us at Mission 35, you can save thousands of dollars and secure a mortgage that truly fits your needs.
Remember, the banks don’t want you to know these secrets—but now you do. Don’t let them take advantage of you. Take control of your mortgage renewal, and you’ll be amazed at what you can achieve.
If you found this article helpful, share it with others who might be facing mortgage renewal soon. And if you’re ready to explore your options, book a free constultation with me today!
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