Should You Renew With Your Bank? What the Renewal Letter Doesn't Say
The honest answer: not without comparing first. When your mortgage term ends, your lender mails a renewal letter with a rate and a signature line. It is designed to be easy — and that ease is exactly the point. The rate in that letter is rarely the lowest your own bank could offer, let alone the best available across the market.
Why the renewal letter is not your best offer
Lenders know that most people renew without shopping around. Signing the letter is frictionless, and a busy household often just signs. Because of that, the offered rate is frequently set higher than what the same lender would give a customer who pushed back or who threatened to leave. The letter is a convenience for the lender first and the borrower second.
Renewal is your moment of leverage
Here is the part the letter does not advertise: when your term ends naturally, you can move your mortgage to another lender with no prepayment penalty. That makes renewal the one moment in your mortgage where you have real leverage and full freedom. You are not locked in. You are free to take the best rate and terms anywhere — and your current lender knows it, which is why a comparison so often gets them to sharpen their pencil.
What “best” actually means
A renewal is not only about the lowest number. It is worth weighing:
- The rate, of course — even a small difference adds up over a multi-year term.
- Prepayment privileges — how much extra you can pay down each year without penalty.
- Fixed versus variable, and the term length that matches your plans.
- Portability — whether the mortgage can move with you if you sell.
The cheapest rate attached to a rigid mortgage is not always the best deal.
How to compare without the hassle
You do not have to phone a dozen lenders yourself. That is what a mortgage broker does. When your renewal approaches — ideally about four months out — a broker compares your lender’s offer against the wider market, factors in your goals, and tells you plainly whether staying or switching leaves you better off. If switching wins, the broker handles the paperwork. If your bank’s offer turns out to be genuinely competitive, you sign it knowing it was tested.
Before you sign anything
A renewal letter is not a deadline to obey; it is an invitation to negotiate. Give yourself a few months and get a second opinion. If your mortgage is coming up for renewal in the Calgary area, reach out — a quick review costs nothing and often saves a meaningful amount over your next term.