Skip to main content

The biggest monthly expense for most Canadians is their mortgage payment. Yet according to an Angus Reid survey, almost 27% of households automatically renew their mortgage when the term is up instead of trying to find a better deal. So, before you renew your mortgage, be sure to read these helpful tips…

Get Going Early
Start shopping around for a better rate four to six months before your mortgage is up for renewal. That’s the longest lenders will guarantee a discounted rate, says Vancouver’s Robert McLister, editor of Canadian “If your current lender’s rates rise, you’ve got your guaranteed rate to fall back on. If they drop, you simply renegotiate a lower rate.”

Do Your Homework
Before negotiating a lower rate from your bank, find out what other lenders are offering. Plenty of websites post current rates from all the banks, which can vary widely. A good one to look at is

Never Accept the Banks Posted Rate
“If you don’t come right out and ask for a better rate, you won’t get one,” says Alan Silverstein, a real estate lawyer in Toronto and author of The Perfect Mortgage: Cutting the Cost of Home Ownership. He also notes that banks may be more willing to lower your rate if you transfer over other accounts or investments.

Negotiate on Other Available Options
Don’t just fixate on the interest rate. The amortization period, the rate type (fixed or variable) and the flexibility of the payment schedule can be crucial to lowering your costs.

Change Lenders
“A lot of people renew with their lender and don’t even think about switching to another one, despite the fact that they could do better,” says Silverstein. Note that there’s no penalty if you switch at renewal time.

Broker a Deal
If you don’t like negotiating and don’t have the time to research rates, a mortgage broker will do the legwork for you. This can save you valuable time and money! According to the Bank of Canada, people who use a broker usually pay less than those who don’t. Using a broker can typically save $1,670 of interest on a $200,000 mortgage over five years. “The results of using a good broker are twofold,” says McLister. “Better rates and a less restrictive mortgage.”

Did you know?!?
Saving even half a percentage point on your mortgage rate can save you up to $10,000 over 25 years (based on a $150,000 mortgage).