Should I Accept My Mortgage Renewal Offer?
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·Reviewed by a mortgage professional
Short answer
Not automatically. Your renewal letter is an offer, not necessarily your best or only option. Comparing it to other lenders before you sign takes little time and can change your payment for the entire next term.
The plain-English version
Lenders often send renewal offers at a posted or near-posted rate, counting on the fact that most people simply sign and return them. Switching lenders, or negotiating, can sometimes secure a better rate or product — but it depends on timing, penalties, and whether you still qualify.
Renewal is also a natural checkpoint to reassess your whole situation: your balance, your income, your goals, and whether features like prepayment options or portability matter to you now.
Alberta-specific considerations
- Switching to a new lender usually means a new application and often a property appraisal — start 3–4 months before your maturity date.
- If your Alberta property value has changed significantly, your loan-to-value ratio (and your options) may have changed too.
- Collateral charge mortgages (common with some lenders) can make switching more involved, so factor that in.
Example scenario
On a $350,000 balance, the difference between a renewal at 5.9% and 5.3% is roughly $115/month — about $7,000 over a five-year term. That is the kind of gap that makes a quick comparison worthwhile before you sign.
Common mistakes to avoid
- Signing the first offer the day it arrives without comparing anything.
- Waiting until the last week, when there is no time to switch lenders.
- Focusing only on rate and ignoring prepayment terms, portability, or penalties.
- Assuming you cannot move because of a penalty, without actually checking the numbers.