For many, this can result in unnoticed but significant financial losses—up to $13,000. Yet just a few hours spent analyzing the market can save thousands of dollars in a family budget.
Mortgage on autopilot is an expensive decision
At renewal time, the bank typically offers the client its own interest-rate option. However, this is far from always the best offer on the market. Many borrowers sign the documents without comparing alternatives—due to a lack of time or information.
This is exactly the trend regularly observed by mortgage broker Chantal Chevalier from Groupe Hypothécaire Orbis:
“Clients often come to me just a few weeks before their mortgage term ends, without having even received a notice from the bank. They have to urgently look for solutions.”
It’s important to understand: the rate offered by the bank is not a final offer, but a starting point for negotiations. In most cases, the terms can be improved either by negotiating with the bank or with the help of an independent broker.
The reason is simple: banks are often focused on attracting new clients rather than retaining existing ones. Customer loyalty, contrary to expectations, does not guarantee better terms.
What it costs in practice
Let’s look at a real example. A triplex in the Rosemont area (Montreal), purchased in 2021 at a fixed rate of 1.74%, cost the owner $1,970 per month.
Upon renewal in 2026 at 3.94%, the monthly payment rose to $2,425. That’s an additional $5,460 per year.
If, through a mortgage broker, you obtain a variable rate around 3.35%, the savings would be about $120 per month—or $1,440 per year.
According to Ratehub, borrowers who switch lenders at renewal save on average up to $13,857 compared with automatic renewal at their own bank.
One of Chantal Chevalier’s clients—let’s call him Bernard—found himself in a similar situation. By taking the time to compare offers, he secured a better rate, which allowed him to save more than $10,000 over five years. In the end, he changed financial institutions.
Fixed or variable rate?
The choice between a fixed and a variable rate remains a strategic decision. For example, the difference between 3.94% (fixed) and 3.35% (variable) on a $400,000 loan is about $120 per month.
Fixed rates have risen recently—largely due to geopolitical instability. At the same time, the Bank of Canada is holding the policy rate at 2.25%, and in the short term the market is showing relative stability. However, the situation may change.
The choice depends on an individual risk profile, financial goals, and planning horizon. There is no universal answer here.
What to do before renewing your mortgage
To avoid overpaying, it’s worth taking a few simple steps:
— Start shopping 120 days before your mortgage term ends—many lenders allow you to lock in a rate in advance.
— Ask the bank not just for a “rate,” but for the “best possible rate”—wording matters.
— Check your mortgage terms: is it open or closed? Switching to another lender may involve penalties that wipe out the savings.
— Keep all offers in writing—this is your main tool for negotiating with the bank.
Bottom line
Mortgage renewal is not a formality, but an important financial moment that directly affects your expenses for years ahead. Careful comparison of offers and a willingness to negotiate can translate into real savings of thousands of dollars.
