Mortgage renewal may seem like a straightforward process—you receive a letter from your current lender with a renewal offer, sign the paperwork, and continue your payments. But accepting your lender’s first offer without exploring other options can cost you thousands over the life of your mortgage.

At renewal, you have the opportunity to secure a better rate, improve terms, and ensure your mortgage aligns with your current financial goals. This is why shopping around is critical, and with the right guidance, you can find a mortgage that works for you—not just your lender.

1. The Renewal Process: Why It’s Easy to Miss Out

When your mortgage term is about to expire, your lender will often send a renewal offer. Many homeowners automatically accept this offer, assuming it’s the best or simplest option. But lenders know that convenience keeps clients from shopping around—and the rate or terms they offer may not be the most competitive.

💡 Did you know? Over 70% of homeowners renew their mortgage without negotiating or exploring other lenders.

By not shopping around, you could miss out on:

  • Lower interest rates.
  • More flexible terms.
  • Better prepayment options or lower penalties.

2. Why Shopping Around for a Mortgage Matters at Renewal

a) Rate Isn’t the Only Factor

While securing the best rate is important, it’s not the only thing to consider at renewal. The right mortgage should also fit your lifestyle, financial goals, and future plans.

Key Features to Compare:

  • Prepayment Privileges: Allows you to pay down your mortgage faster without penalties.
  • Portability: If you move during your next term, can the mortgage transfer to a new property?
  • Payment Flexibility: Options for increasing or deferring payments.
  • Penalties for Breaking the Mortgage: Understand how much you’ll pay if you refinance early.

b) Different Lenders, Different Offers

Every lender has different policies and incentives. By shopping around, you can access:

  • Banks and Credit Unions – Traditional lenders with competitive rates.
  • Monoline Lenders – Specialize in mortgages with lower overhead and often better terms.
  • Alternative Lenders – Flexible solutions for self-employed individuals or those with unique credit situations.

Pro Tip: Even a 0.25% lower rate can save you thousands over the course of your mortgage term.

3. When Should You Start Shopping Around?

Don’t wait until the last minute to explore your options. Start shopping around for renewal offers 120 days (4 months) before your mortgage term ends. This gives you:

  • Time to compare offers from multiple lenders.
  • The ability to lock in a rate early—some lenders hold rates for up to 120 days.
  • Leverage to negotiate with your current lender if you receive a better offer elsewhere.

💡 Tip: If rates drop after locking in, many lenders will adjust the rate downward before closing.

4. How Homewise Simplifies the Process

Shopping for a mortgage on your own can feel overwhelming. That’s where Homewise comes in. We make the renewal process simple, transparent, and tailored to your needs.

Here’s how we help:

  • Access to 30+ Lenders: From major banks to monoline lenders, we compare rates and terms to find the best options for you.
  • Personalized Advice: We focus on more than just the rate—helping you choose a mortgage with the right features, flexibility, and lender type.
  • Time Savings: Instead of reaching out to multiple lenders, Homewise brings the best offers directly to you.
  • Unbiased Recommendations: We work for you—not the lenders—ensuring our advice is always in your best interest.

No pressure, no sales tactics—just clear, unbiased mortgage advice.

5. Real-Life Savings: The Impact of Shopping Around

Scenario:

  • Current Mortgage Balance: $400,000
  • Renewal Offer from Existing Lender: 5.25% fixed for 5 years.
  • Offer from a Competing Lender (after shopping around): 4.75% fixed for 5 years.

Savings Breakdown:

  • Monthly Payment (5.25%): $2,376
  • Monthly Payment (4.75%): $2,293
  • Savings per Month: $83
  • Savings Over 5-Year Term: $4,980

By simply shopping around, this homeowner saved nearly $5,000 without increasing their mortgage term or extending the amortization.

6. Avoiding Common Renewal Mistakes

a) Accepting the First Offer

Lenders rely on renewal inertia—homeowners accepting their first offer without questioning it. Always compare rates from multiple lenders.

b) Ignoring Terms and Conditions

A slightly lower rate may come with stricter prepayment limits or higher penalties for breaking the mortgage early. Consider the overall mortgage flexibility.

c) Failing to Plan for the Future

If you anticipate moving, renovating, or refinancing in the next few years, choose a mortgage with:

  • Portability (to transfer the mortgage to a new property).
  • Low Break Fees for refinancing flexibility.

7. Key Questions to Ask at Renewal

  • Can I negotiate the rate or terms with my current lender?
  • What are the penalties if I break the mortgage early?
  • Are there better rates or features available with other lenders?
  • How does my mortgage fit with my financial goals for the next 3-5 years?

Need help answering these questions? The Homewise team is here to guide you through the process, ensuring you make the most of your renewal.

Final Thoughts

Mortgage renewal is more than just signing a piece of paper—it’s an opportunity to save money, secure better terms, and align your mortgage with your future goals. Shopping around ensures you’re getting the best deal possible, and with Homewise by your side, the process is simple, transparent, and designed to benefit you—not your lender.

Ready to explore your mortgage renewal options? Start the process with Homewise and let us help you find the best mortgage for your future.