Your renewal letter: what to do 120 days before

Renewal is the one moment in a mortgage when you can change lender with no penalty. Lenders know that most people will not, and the first letter is priced accordingly. Treating the letter as a decision instead of a formality is worth, on a typical Calgary balance, thousands of dollars over a term.

The timeline

120 days out. Rates can be held for about this long. This is when we start: we pull the current market, check what your lender is likely to offer, and ask what has changed in your life since you last signed.

90 to 60 days out. Your lender’s letter arrives, often with a rate above what it offers new clients. We put it beside the market and send you the comparison in writing, including the case for staying if that is the honest answer.

45 days out. If switching wins, the new lender’s application is approved by now and the transfer is scheduled for your maturity date. If staying wins, we have usually negotiated the letter down first.

Maturity date. The old mortgage is paid out by the new one. You make your next payment to the new lender. Nothing else changes.

What switching costs

For a straight switch of the same balance, usually nothing: most lenders cover the appraisal and the transfer fees, and no lawyer is needed because the mortgage is assigned rather than discharged. If you change the amount or the structure, it becomes a refinance, and legal fees apply. We tell you which one you are doing before anything is signed.

Qualifying

Renewing with your current lender does not require re-qualifying. Switching does, and for an uninsured mortgage that means the stress test again. If income has fallen since you bought, staying may be the only option, and we will say so early rather than late.

Use the moment

Renewal is also a cheap time to fix things: shorten or lengthen the amortization, add prepayment room, consolidate a debt, or add a line of credit. None of these carry a penalty at renewal. Run the renewal calculator with your letter’s rate, then set a reminder so we contact you before the next one.