Somewhere between four and six months before your mortgage matures, a letter or an email arrives from your lender. It has a rate on it, a couple of term options, and a signature line. It is polite, it is easy, and it takes about thirty seconds to accept.
A large proportion of Canadian mortgage holders sign it without contacting anyone else. Lenders know this precisely, and they price accordingly.
Here is the thing worth internalising: renewal is the single point in the life of a mortgage where you can move to a different lender without paying a penalty. Every other time, leaving costs money. At maturity, it costs nothing. That is enormous leverage and it evaporates the moment you sign.
Why the offered rate is usually not their best rate
Lenders segment. New business is competitive, because you are comparing them against others. Renewals are less competitive, because most people do not compare at all.
So the number on the letter is frequently set above what the same lender would offer a new client with an identical file. It is not deception; the terms are exactly as stated. It is a bet on your inertia, and it is a bet they win most of the time.
What breaks the pattern is having a real alternative in hand. Not a threat, just a quote. Lenders have retention teams whose entire function is to improve an offer when a client is genuinely leaving, and those teams are not activated by a phone call saying you would like a better rate. They are activated by a competing commitment.
The mechanics of what actually determines your offer, and how to push it, are on the renewal rates page.
The timeline, and when to start
Six months out. Most lenders will let you lock a rate for renewal from around this point, and you can start shopping. There is no downside to holding a rate early: if rates fall you take the lower one, and if they rise you are protected.
Four months out. The practical time to start if you have not already. A switch to a new lender takes several weeks to arrange, and starting late is how people end up accepting the offered rate simply because there is no time left.
Thirty days out. Getting tight. A switch is still possible but the paperwork becomes stressful.
Maturity day. If nothing has been signed, most lenders convert you automatically, frequently to a short term at a poor rate, sometimes to an open mortgage at a considerably worse one. This is the most expensive outcome available and it happens by doing nothing.
Renewal is also a re-qualification, if you move
An important asymmetry that people miss.
Staying with your existing lender at renewal generally requires no new qualification. They already hold the mortgage, you have been paying it, and they will typically renew you without a credit check or income verification.
Moving to a new lender means a new application: credit pulled, income verified, and the property assessed. Under current rules a straight switch of an existing mortgage, with no increase in the amount and no change to the amortisation, is treated more leniently on the stress test at many lenders. But if your income has fallen, your credit has deteriorated, or you have become self-employed since you last applied, you may not qualify to move even though your existing lender would renew you happily.
That is worth knowing in advance, because it changes your negotiating position considerably. If you cannot leave, you cannot use leaving as leverage.
Renewal is not only about the rate
It is the natural moment to reconsider the whole structure, and it costs nothing to do so.
The term length is arguably a larger decision than the rate, and it depends on what you expect to happen in your life rather than on rate forecasts. See choosing a term.
The amortisation resets to whatever remains, but you can shorten it deliberately to clear the mortgage sooner, or extend it at some lenders to reduce the payment. You can change payment frequency. You can check whether the new product has decent prepayment privileges and whether it is portable, both of which matter if there is any chance you move.
And if you need money for something, renewal is the cheapest moment to add it, because there is no penalty to restructure.
What a switch actually involves
Less than people fear. A straight switch is a defined process, often with the new lender covering the legal and appraisal costs as an incentive. Your payment date may shift slightly and you set up a new pre-authorised payment.
The paperwork and who pays for what is covered on the transfer page, and the strategic question of whether to move at all is on switching lenders.
What Chad does at renewal is take one credit pull to a panel of lenders, bring back what they will actually do, and put that beside your existing lender's offer. Sometimes the answer is that your current lender is competitive and you should stay. That is a perfectly good outcome, and it is worth twenty minutes to know.