Step 1: Do Nothing When the Letter Arrives
Your lender's renewal offer typically arrives 30–45 days before your maturity date. It's timed to create urgency and discourage comparison shopping. Resist the urge to sign immediately. The offer is almost never their best rate.
The only thing you need to do when the letter arrives is note your maturity date and contact a broker or start shopping immediately. The ideal negotiation window is 90–120 days before maturity, but even 30 days out you have leverage.
Step 2: Get Competing Offers Before You Call Your Bank
This is the single most important step. Calling your bank and saying "I'd like a better rate" rarely works. Calling your bank with a formal competing offer from another lender changes the conversation entirely.
An independent mortgage broker gives you access to rates from 50+ lenders simultaneously — including monoline lenders whose rates are not available through any branch. A broker's rate hold is a legitimate competing offer, not just a number you found online.
Step 3: Call Your Current Lender's Retention Team
Do not call the general customer service line. Ask specifically for the mortgage retention or renewal department. These teams have discretionary room to improve rates that front-line agents do not.
What to say
- State that your mortgage is coming up for renewal and you've been shopping the market
- Reference the competing offer: "I have a broker offer at [rate] from [lender type]. I'd prefer to stay with you — what can you do?"
- Be specific about what you're asking for: "Can you match or beat [rate]?"
- Ask about term flexibility: "Is a 3-year term priced differently than 5-year right now?"
- Ask what else they can offer: "Are there any prepayment or portability improvements you can include?"
What not to say
- Don't say you definitely want to leave — it closes off negotiation
- Don't accept the first counter-offer without pausing to consider it
- Don't mention a rate without having an actual offer to back it up
- Don't negotiate on rate alone — total cost includes prepayment penalties, portability, and privileges
Step 4: Compare the Counter-Offer Carefully
When your lender comes back with an improved rate, compare it against the broker offer on more than just the rate number. A lower rate with restrictive prepayment terms can cost more over the term than a slightly higher rate with better flexibility.
| Factor | Why It Matters |
|---|---|
| Interest rate | The headline number — but not the only one |
| Prepayment privileges | 10% vs 20% annual lump-sum can save thousands if you come into money |
| Portability | Can you take the mortgage to a new property if you move? |
| Penalty calculation method | IRD vs 3 months interest — fixed penalties can be very large |
| Blended rate option | Some lenders offer a blended rate to extend early — useful if rates rise |
Step 5: Know When to Switch Lenders
If your current lender won't match the competing offer — or matches it but with worse terms — switching lenders at renewal is the right move. Since there is no prepayment penalty at maturity, the only switching cost is a title transfer (typically $500–$1,000, often covered by the new lender).
As of 2023, switching lenders at renewal for uninsured mortgages (20%+ equity) no longer requires re-passing the stress test if the loan amount and amortization stay the same. This removed the last barrier that kept many borrowers locked in.
Step 6: Lock In a Rate Hold While You Decide
Once you have a broker offer, lock in the rate hold immediately. Most lenders hold rates for 90–120 days. This protects you if rates rise while you're negotiating — if rates drop, your broker can typically improve the locked rate before closing.
A rate hold costs nothing and removes all downside risk from the decision. There's no reason not to lock one in as soon as you have a competitive offer in hand.
What a Broker Does That You Can't Do Alone
An independent broker creates genuine competition for your mortgage, which is something a direct call to your bank cannot replicate. The broker submits your file to multiple lenders simultaneously and presents the best offer — which becomes your negotiating position with your current lender.
- Access to wholesale rates not available through any branch
- Knowledge of which lenders are currently pricing aggressively
- Experience negotiating with each lender's retention team
- Ability to compare total cost — not just rate — across 50+ products
- No cost to you: the lender pays the broker a finder's fee at closing
The broker fee objection is one of the most common misconceptions in Canadian mortgages. Brokers are compensated by the lender, not the borrower. The rate you receive through a broker is the same as or better than what you\'d get going directly to that lender.