Your mortgage renewal is coming. And your bank is counting on you not shopping around.

You got a letter in the mail. Maybe an email. Your mortgage is coming up for renewal, and your lender has helpfully included their "best offer" right there in the envelope.

Here's something they're not telling you: that offer is almost never their best offer. And signing it without a conversation could cost you thousands of dollars over the next five years.

What actually happens at renewal time?

When your mortgage term ends, you don't automatically own your home free and clear. You still owe whatever is left on the principal, and now you need to agree on a new rate and term for the next chapter.

Your lender knows this. They also know that most Canadians sign the renewal paperwork without any negotiation, without shopping around, and sometimes without even reading it carefully.

According to the Financial Consumer Agency of Canada, the majority of mortgage holders simply renew with their existing lender at the posted rate. That stat should make your stomach drop a little. Posted rates are not competitive rates. They are the rate your bank offers when they assume you are not paying attention.

Why this moment matters more than you think

Your renewal is one of the few times in your mortgage life when you hold real leverage. Your lender wants to keep you. You have an established payment history. You are not starting from scratch.

But leverage only works if you use it.

Here is the thing that catches most homeowners off guard: at renewal, you do not have to re-qualify under the mortgage stress test if you are staying with your current lender and not changing your amortization or borrowing more money. That sounds like a reason to stay put. It is actually a reason to look around, because another lender may still be able to beat your current offer, and the savings can be significant.

Every fraction of a percentage point matters over a five-year term. On a $500,000 mortgage, the difference between 5.50% and 5.10% is roughly $10,000 in interest paid over five years. That is a family vacation. That is a chunk of your kids' education fund. That is real money sitting on the table.

The renewal letter is not a conversation. It is a default.

Your bank's renewal letter arrives early, sometimes four to six months before your term ends. The timing is intentional. The earlier they lock you in, the less likely you are to shop around.

Here is what that letter actually represents: it is a default action. It is the path of least resistance dressed up to look like a good deal. Sometimes you will see language like "special renewal offer" or "valued client rate." Do not let that language do its job on you.

The offer may be fine. It may even be competitive. But you will never know unless you take it somewhere else and compare.

A mortgage agent, unlike a bank employee, works for you. We have access to multiple lenders and can often negotiate rates and terms you would not get walking into a branch. And because we are paid by the lender upon funding, the advice itself does not cost you anything.

What the stress test means at renewal, and when it kicks in

A quick word on OSFI's mortgage stress test, because this is where a lot of confusion lives.

If you renew with your current lender and keep everything the same, you do not need to re-qualify. That is a legitimate advantage of staying, especially if your income situation has changed since you first got the mortgage.

Since November 2024, federally regulated lenders are also no longer expected to apply the stress test to a straight switch at renewal, where the balance and amortization are unchanged. That change removed the biggest barrier to shopping your renewal, and a lot of homeowners still do not know about it. The full renewal playbook covers the boundaries of that rule.

Many homeowners assume the stress test disqualifies them from switching, so they do not even try. In many cases, they would qualify just fine and could be saving a meaningful amount on their rate. The only way to know is to actually go through the exercise.

Note that rates change frequently. Any specific rate figures here are illustrative and subject to change, and I can walk you through current numbers when you connect.

A real-world example

Take a couple in their mid-40s. They have been with the same bank for 12 years. They own a home in the London area with about $380,000 left on the mortgage. Their renewal comes up and they get a letter with an offered rate.

They figure the bank has treated them well, they do not want the hassle, and they sign and send it back.

What they did not know: a broker could have placed them with another lender at a rate that was 0.40% lower. Over their five-year term, that difference works out to over $7,000 in interest. They also had some higher-interest debt sitting on a line of credit that could have been wrapped into the renewal, cutting their monthly cash flow drain by several hundred dollars.

They are not bad at money. They just did not have anyone in their corner for that conversation.

What to do right now

If your renewal is coming up in the next six to twelve months, here is the honest advice:

Do not wait until the letter arrives. Do not let the bank set the pace on this.

Start the conversation early. I can review your current situation, model out a few scenarios, look at your full financial picture including any debts you might want to consolidate, and tell you plainly whether staying or switching makes more sense for you specifically.

There is no pressure, no commitment, and no cost for that conversation. What there might be is a few thousand dollars you did not know you were about to leave on the table.

Book your free mortgage review

Bring your current mortgage statement and any renewal letter you have received. That is all you need to start.

Written by Derrick Johnston, Mortgage Agent Level 2, BRX Mortgage Inc. (FSRA #13463). Published 2026-06-03. General information only, not legal, tax or investment advice. Rates, lender policies and government programs change over time.