Mortgage Renewal Negotiation Tips for Canadians

Renewing your mortgage may seem like a routine task—especially if you’ve been with your lender for years. But what many Canadians don’t realize is that mortgage renewal time is one of the most powerful opportunities you’ll ever have to renegotiate your financial future.

Mortgage lenders often send out renewal offers assuming you’ll sign without shopping around. And too many Canadians do exactly that, locking themselves into rates that are much higher than necessary. If you take a proactive approach and are willing to negotiate, you can save thousands over the next few years.

In this guide, we’ll cover essential mortgage renewal negotiation tips for Canadians, whether you're dealing with a major bank, a credit union, or using a mortgage broker. Whether it’s your first renewal or your fifth, this advice can help put money back in your pocket.

1. Start the Process Early (3–6 Months Before Maturity)

Don’t wait for your lender to mail you a renewal letter. Start researching 3 to 6 months before your mortgage term ends. Most lenders allow early renewals within 120 to 180 days without penalties.

Getting an early start gives you:

• Time to compare offers

• Time to meet with a mortgage broker

• Time to gather documentation in case you switch lenders

• Leverage: showing your lender you’re actively exploring options signals you’re not a passive client

Procrastination is the enemy of negotiation. Mark your calendar and give yourself time to explore.

2. Understand Your Mortgage Needs

Before you compare rates, ask yourself what you truly need this time around.

• Do you plan to sell or move soon? A shorter term or variable rate may make more sense.

• Are you concerned about rising rates? A fixed rate might offer peace of mind.

• Will you make lump-sum payments? Ensure your mortgage has prepayment privileges.

• Are your finances tighter now? Consider longer amortization or smaller payments.

Understanding your situation helps you filter through options intelligently instead of being dazzled by a low number that doesn’t suit your goals.

3. Don’t Accept the First Renewal Offer

Lenders know that a surprising number of borrowers accept the first offer sent in the mail—often without reading the details. This offer is usually not the best rate the lender can give you.

Always assume your first renewal offer is inflated. Contact your lender, thank them for the offer, and ask, “Is this your best rate?”

Spoiler alert: It probably isn’t.

4. Shop Around and Get Competing Offers

This is the single most powerful tool you have: shop around. Get quotes from:

• Other banks

• Credit unions

• Online lenders

• Mortgage brokers

You don’t need to commit to any of them. The goal is to see what’s available and gather written offers to use as leverage.

Once you have a lower rate or better term in writing, bring it back to your current lender and say:

“I’d like to stay with your institution, but I’ve been offered a lower rate elsewhere. Can you match or beat it?”

Many times, lenders will suddenly find room to improve their offer. This simple move can result in savings of tens of thousands over the life of your mortgage.

5. Consider Working With a Mortgage Broker

Mortgage brokers work on your behalf, not the bank’s. They have access to dozens of lenders and may be able to find:

• Lower rates

• More flexible terms

• Lenders that better suit your unique situation (e.g., self-employed, bad credit, high-ratio mortgages)

Brokers are especially valuable if you don’t want to do all the research yourself or feel overwhelmed by the options. And since most are paid by the lender (not you), it’s usually free.

Tip: Choose a broker with experience and good reviews. A good broker will advocate for your best interests.

6. Ask for a Better Rate—Then Ask Again

If you’re sticking with your current lender, don’t be afraid to negotiate multiple times.

Let’s say TD offers you 5.84% on a 3-year fixed. You get a competing offer from True North Mortgage for 5.29%. You call TD, and they drop to 5.49%. Don’t stop there—let them know you’re still considering the lower offer and ask if they can go lower. It’s a dance.

Many Canadians are too polite or passive during negotiations. But you’re not being rude by asking for a better deal—you’re being financially smart.

7. Be Willing to Switch Lenders

If your current lender won’t match the better rate or terms elsewhere, seriously consider switching.

While switching involves a bit of paperwork and possibly an appraisal or legal fee, the long-term savings often justify the effort. Brokers can even help facilitate the switch with minimal disruption to your life.

Don't let convenience cost you thousands. Run the numbers and make an informed decision.

8. Watch Out for Hidden Conditions and Penalties

When reviewing renewal offers, don’t just look at the interest rate. Examine:

• Prepayment penalties

• Fixed vs. variable options

• Portability features

• Blended rate clauses

• Renewal fees or discharge penalties

A lower rate with harsh penalties may not be worth it, especially if you anticipate needing flexibility.

Always ask for a breakdown of terms and read the fine print carefully.

9. Maintain a Good Credit Score

Lenders still assess your credit when renewing, especially if you switch institutions. A strong credit score makes you more attractive and helps you qualify for lower rates and better terms.

To keep your score high:

• Make all payments on time

• Keep credit card balances low

• Avoid applying for new credit right before renewal

If your credit has improved since your last mortgage term, you may qualify for even better deals.

10. Don’t Let Loyalty Cost You

Many Canadians have been with their bank for 10, 20, or even 30 years and assume that loyalty means better treatment. Unfortunately, that’s rarely the case.

Banks count on loyal customers not shopping around.

If you do your homework, your current lender may improve their offer—but they often won’t unless you push. Your financial loyalty should go to whoever gives you the best combination of rate, service, and flexibility—not to a logo or brand.

Final Thoughts

Renewing your mortgage isn’t just a checkbox on a form—it’s a crucial financial decision that can affect your life for years. Treat it with the same seriousness as your original mortgage. Negotiate assertively. Shop around. Know your options.

By following these tips, you’ll put yourself in the best possible position to secure a mortgage renewal that works for you—not just your lender.

Pro tip: Even after you renew, set a calendar reminder for 3 years from now to start the process early again. Your future self will thank you.