Renewing Your Mortgage in Canada: 4 Ways to Save Thousands

If your mortgage renewal is coming up in the next year or two, get ready for bigger monthly payments. Rates have climbed since most people locked in, so the loan itself is more expensive now. The good news is that a smart renewal can still save you thousands of dollars, as long as you go in with a plan.

I'm Moe Asgarian, a Toronto real estate broker, ranked #47 worldwide and Top 1% in Canada with RE/MAX. My day job is buying and selling, not mortgages, but almost every client I work with is dealing with one, so I have picked up plenty. The real expert is your mortgage broker. Still, here are four things that can keep your renewal from costing more than it should.

Don't Accept the First Rate They Send You

When your renewal date gets close, the bank mails you a rate. A lot of people just sign it and move on. What most of them do not realize is that this rate is negotiable. Call the bank and ask for something better. Worst case, they say no and you have lost nothing. But with many analysts still expecting rates to come down, there is real room to push. I am not saying you will get a miracle. I am saying a short conversation can put money back in your pocket every single month.

You Can Switch to a New Lender

You are not married to your current bank. If another lender has a better rate or a better product, you can move. The catch is that switching means qualifying again and going through the stress test. If you stay with your current lender, you usually skip that and the whole thing is simpler. So weigh it: is the better rate worth the extra paperwork? Sometimes it clearly is, sometimes it is not, and only your own numbers can tell you which.

How I Renewed My Own Mortgage

Let me tell you what I did. My own mortgage came up for renewal in July 2024, and I was with RBC. Months ahead, they sent me a letter with a proposed rate. I started negotiating, asked them to do better, and they lowered it. I asked again and they dropped it more. Meanwhile I was watching the market closely. At some point their rate stopped being competitive, so I went to a rival bank and got a quote. I told RBC that a competitor had offered me a better rate and forwarded them the email. RBC turned around and matched it. On the fixed rate, the gap was close to 0.75%, which is a big number on a monthly payment. So negotiate first, and do not be shy about bringing a competitor's offer to the table.

Make a Lump-Sum Payment If You Can

If your finances allow it, look into paying down a chunk of the principal in one shot, what is often called a lump-sum payment. Some mortgages let you pay more than the scheduled monthly amount. Check what your terms allow. Doing this while your rate is low can save you thousands, because it shrinks both the length of the loan and your monthly payments at the same time.

Watch the Amortization Period

Here is the one that catches people. When you renew, the bank will very likely offer to reset your amortization back to the start. Picture this: they tell you that keeping your current schedule means paying $4,000 a month, but if you stretch your remaining 25 years back out to 30, they will bring it down to $3,000. For a lot of families, paying $3,000 instead of $4,000 sounds like a gift. Just remember the bank is collecting more interest by doing this. Yes, $3,000 a month beats $4,000. But those extra 5 years hand the bank a lot of interest. If you think your income might improve in two or three years, keeping the shorter amortization can save you a serious amount of money.

Those are the four: do not rush to accept the first rate, switch lenders if it makes sense, do not forget lump-sum payments, and be careful about stretching your amortization. If your renewal is coming up and you want a second set of eyes on it, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.