Why renewal shopping pays
Major banks send renewal offers with a posted rate — often 0.50% to 1.00% above what's actually available to a renewing borrower who shops. The bank assumes inertia. Most borrowers oblige.
Brokers see all the rates. We can benchmark your bank's offer against the actual market, and if your bank's number is uncompetitive (it usually is), we have access to lenders who'll do better.
The math is straightforward: 0.50% saved on $350,000 over 5 years is roughly $10,000 of interest. Often more.
Switch costs are usually zero
When you switch lenders at renewal, the new lender almost always covers the legal, appraisal, and discharge fees. Out-of-pocket cost to you: $0.
This is a marketing investment by the new lender. They want your mortgage badly enough to absorb a few hundred dollars of switch costs. Knowing this lets you negotiate from a position of strength.
If your bank wants to keep you, they'll match. If they don't, you switch. Either way, you win — versus the path of least resistance, which is signing whatever shows up in the mail.
Don't break early just to renew
If your term isn't actually maturing, you'd have to break the mortgage to refinance early — which usually means a penalty. For closed fixed-rate mortgages, that penalty can be substantial (3 months interest or interest rate differential, whichever is greater).
The break-vs-wait math depends on the rate gap. If today's rates are dramatically lower than your contract rate, breaking might still come out ahead even with the penalty. If they're similar or higher, wait.
We can run that math for you with your specific lender's penalty structure. Some lenders calculate IRD using their posted rates (penalizing) vs their discounted rates (less penalizing) — and the difference can be tens of thousands of dollars.