Why is the renewal letter your bank mails you usually not their best offer?
Because it is priced on the assumption that you will not shop it. That letter is a default option, not a competitive bid. The same bank often quotes differently once it knows you are talking to someone else.
Last updated 2026-08-12
Why would a bank lead with a number that is not their best?
Because most people simply sign it. A renewal is the cheapest business a lender can write, with no acquisition cost and no full re-underwriting.
One letter, one signature, and the loan runs for another term. Your bank knows you would rather not deal with it, and it prices accordingly.
What happens if I do nothing?
In most cases the mortgage renews automatically on whatever terms the letter states. Some lenders will move you to a variable or renew you at posted pricing instead.
Which means dealing with it later is itself a decision, and usually the expensive one.
Can I just call and negotiate it myself?
Usually you can move it some. There is almost always room in that first number, especially if you already hold a written offer from somewhere else.
How far you get depends on whether they believe you would actually leave. Saying it and holding a competing approval are not the same thing.
How much hassle is switching lenders, really?
Less than most people expect. A standard switch for the same balance is not a purchase application from scratch. It is paperwork and timing.
You will generally provide income confirmation, a property tax notice, and your current mortgage statement. Many lenders cover some or all of the transfer costs on this kind of switch, though it varies by lender.
What changed in November 2024?
Switching got easier. Generally speaking, if you move lenders at maturity for the same balance and the same remaining amortization, you typically no longer have to requalify under the stress test.
Be clear on what that means. The stress test step is waived, not the approval. Income, credit and debt ratios are still reviewed, and it depends on the lender and how it is regulated.
I have banked here for fifteen years. Does loyalty count?
On pricing, generally not. Most renewal offers are priced on the risk of losing you, not on how long you have been a customer.
The uncomfortable version: the easier you are to keep, the more ordinary your offer looks. That is not personal. It is how the pricing model is built.
Besides the rate, what else should I be reading?
At minimum three things: the prepayment terms, whether the mortgage is portable, and how the charge is registered on title.
A cheaper looking contract with a punishing prepayment penalty is not automatically the better deal. What matters is total cost across the whole term, not the number on the front page. This is general information. For the letter actually sitting on your table, one conversation beats guessing.
Common questions
When does the renewal letter usually arrive?
Somewhere between a few weeks and a few months before maturity, depending on the lender. The letter is not your starting line. About 120 days out is.
My income or job changed recently. Should I still shop?
Ask first. A same-balance switch is assessed differently than a purchase, but changes do affect which lenders are open to you. Lay out the current picture, then look at the options.
Is there a penalty for switching lenders?
At maturity, generally not, because the term has run its course. Penalties come up when you break a term early, which is a different situation.
Do I pay the broker?
On standard residential mortgages the broker is typically compensated by the lender. In some situations, such as impaired credit or private lending, there is a broker fee, and it must be disclosed to you in writing beforehand.
I already signed the renewal letter. Can I change it?
It depends what you signed and how close you are to maturity. Sometimes there is room, sometimes there is not. Asking before you sign is far easier than fixing it after.
How does this land on your file?
The above is general. How it works out for you takes about ten minutes on the phone.
✆(604) 727-1629