Introduction: Why Mortgage Renewal Matters More Than Ever in 2025
For millions of Canadian homeowners, mortgage renewal is a crucial financial milestone. With the high cost of borrowing in 2025, securing the best mortgage renewal rates is more important than ever. Lenders are actively competing to retain clients, and if you don’t negotiate properly, you could be leaving thousands of dollars on the table.
Many homeowners simply accept the first renewal offer from their lender, assuming it’s the best rate available. However, banks and financial institutions rarely offer their lowest rates upfront. The good news? You have more negotiating power than you think.
This guide will break down the mortgage renewal process in Canada, how to compare and negotiate the best mortgage renewal rates, and key strategies to save money on your next renewal.
What Is Mortgage Renewal?
A mortgage renewal happens when your current mortgage term (e.g., 3, 5, or 10 years) ends, and you need to either:
✅ Renew with your existing lender under new terms and rates
✅ Switch to a new lender offering a better deal
✅ Refinance your mortgage to change the structure of your loan
If you don’t take action, your lender will typically auto-renew your mortgage at their posted rate, which is usually much higher than the best mortgage renewal rates available in the market.
How the Mortgage Renewal Process Works in Canada
Step 1: Your Lender Sends a Renewal Offer (90-120 Days Before Maturity)
Most lenders send a mortgage renewal offer 120 to 90 days before your current term expires. This offer includes:
✔ Your new proposed interest rate
✔ Your new mortgage term (1, 3, 5 years, etc.)
✔ Your updated monthly payment amount
📌 Important: This is rarely the best offer your lender can provide.
Step 2: Reviewing Your Mortgage Renewal Offer
Before accepting the renewal, take time to evaluate:
- Current market interest rates – Compare offers from different lenders
- Your financial goals – Do you want a shorter or longer term?
- Payment flexibility – Check for prepayment options
- Variable vs. Fixed rate mortgage – Consider which one is best for your situation
Step 3: Negotiating with Your Lender
If you want to stay with your current lender, don’t accept the first renewal rate, instead, call them and ask for a better deal.
🔹 Tip: Be prepared with competing offers from other lenders to leverage a lower rate.
Step 4: Comparing & Shopping Around for the Best Mortgage Renewal Rates
If your lender doesn’t give you a competitive offer, it may be time to switch lenders. Other banks and mortgage brokers often offer:
✔ Lower interest rates
✔ Cash incentives to switch (covering fees like legal and appraisal costs)
✔ More flexible mortgage terms
Step 5: Finalizing Your Mortgage Renewal or Switching Lenders
Once you’ve negotiated the best deal, sign your new mortgage contract before your renewal date to avoid penalties or lapses in your mortgage agreement.
How to Negotiate the Best Mortgage Renewal Rates in 2025
1. Start Shopping Early
📌 You can lock in a renewal rate up to 120 days before your term expires.
The earlier you start comparing mortgage renewal rates, the more time you have to:
✔ Research different lenders
✔ Negotiate better terms
✔ Avoid last-minute pressure to accept a bad deal
2. Check Current Market Rates & Competing Offers
Always compare your lender’s renewal rate with rates from other financial institutions. Some of the best sources for mortgage rate comparisons include:
- Bank websites
- Mortgage brokers
- Credit unions
- Online rate comparison tools
📌 Tip: Many lenders offer special promotions for new clients that aren’t available to renewing customers, so switching may be worth it!
3. Never Accept the First Offer
Banks and lenders rarely offer their lowest rate upfront. Push back and negotiate using:
✔ Competing offers from other lenders
✔ Your excellent payment history
✔ The current Bank of Canada interest rate trends
🔹 Example Script for Negotiation:
“I’ve been a loyal customer for X years, and I see that [Competitor Bank] is offering a lower rate. Can you match or beat this offer?”
4. Consider Switching Lenders
If your current lender isn’t offering you a competitive renewal rate, switching lenders could save you money. Many banks offer:
✔ Lower mortgage rates for new clients
✔ Incentives to cover switching costs (legal fees, appraisals)
✔ Better prepayment options
📌 Tip: If you switch lenders, be aware of any penalties or additional fees.
5. Work With a Mortgage Broker
Mortgage brokers have access to exclusive rates from multiple lenders that the average borrower won’t find online. A broker can:
✔ Negotiate on your behalf
✔ Find special rates not available to the public
✔ Help you switch lenders seamlessly
📌 Fact: Using a mortgage broker is free for borrowers, they get paid by the lender.
Fixed vs. Variable Rate at Renewal: Which One Should You Choose?
Many borrowers ask: Should I renew with a fixed or variable mortgage rate?
✅ Choose a Fixed-Rate Mortgage If:
✔ You prefer predictable payments
✔ Interest rates are expected to rise further
✔ You want long-term stability
✅ Choose a Variable-Rate Mortgage If:
✔ You can tolerate fluctuations in payments
✔ Interest rates are expected to drop
✔ You want a lower initial rate
📌 Tip: If rates are uncertain, consider a shorter-term fixed rate (1-3 years) instead of locking in for 5 years.
Common Mortgage Renewal Mistakes to Avoid
🔴 1. Automatically Accepting Your Lender’s First Offer
✔ Always negotiate and compare rates before signing.
🔴 2. Waiting Until the Last Minute
✔ Start shopping 120 days in advance to get the best deal.
🔴 3. Failing to Consider Switching Lenders
✔ You could save thousands by switching to a lower rate.
🔴 4. Ignoring Mortgage Terms & Prepayment Options
✔ Make sure your new mortgage allows for extra payments if needed.
Final Thoughts: How to Get the Best Mortgage Renewal Rates in 2025
The mortgage renewal process in Canada has become more competitive than ever, and banks are actively fighting to retain borrowers. By starting early, comparing offers, and negotiating aggressively, you can secure the best mortgage renewal rates and save thousands of dollars.
Key Takeaways:
✅ Never accept the first offer, negotiate!
✅ Start shopping around at least 120 days before renewal
✅ Compare mortgage renewal rates from multiple lenders
✅ Consider switching lenders if your rate isn’t competitive
✅ Work with a mortgage broker for access to exclusive deals
💡 Bottom Line: A mortgage renewal isn’t just a formality, it’s an opportunity to lower your interest rate and save money. Take control of the process, negotiate hard, and secure the best mortgage renewal rates in 2025!
Are You Renewing Your Mortgage Soon?
Share your experiences or ask questions in the comments below! Let’s help Canadian homeowners get the best mortgage renewal rates possible.
