Got Your Mortgage Renewal Letter? What to Do 120 Days Out

Your renewal letter is an invitation to compare

The envelope arrives, or the email lands in your inbox: your mortgage term is coming to an end, and your lender has an offer ready. All you need to do is sign.

It's tempting. Life is busy, and signing feels like one less thing on your list. But your renewal is one of the best chances you'll get to review your mortgage, and the first offer isn't always the best one available.

I'm Theeban Pathmanathan, a Mortgage Agent Level 2 with FIN Mortgage – Dominion Lending Centres. I help homeowners in Toronto, Scarborough, Markham and Durham Region renew smarter or switch lenders. Here's how I'd approach the months before your maturity date.

Timing: why 120 days out matters

Start about 120 to 150 days before maturity

The sweet spot is about four to five months before your term ends. Most lenders will hold a rate for up to 120 days, so starting early gives us time to compare offers and lock in a rate hold while we shop.

If rates drop before you close, a good broker will look at whether you can get the better rate. If rates rise, your hold protects you. Either way, you're not making a rushed decision in the last week.

What if you've already missed that window?

Don't panic. Even a few weeks can be enough to compare options, though you'll have less room to manoeuvre. The worst outcome is letting your mortgage roll over without looking at all.

Why you shouldn't just auto-sign

Your lender's renewal offer is a starting point, not your only choice. Lenders know many people sign without shopping around, and the offer you receive may not be the most competitive one they, or another lender, can offer.

Signing without comparing can also mean missing the chance to fix things that no longer fit your life, such as:

• A new job, a new baby or a move into self-employment
• Plans to renovate, move or buy an investment property
• High-interest debt you'd like to deal with
• Payments that feel tight because your original rate was much lower

What to compare beyond the rate

The lowest rate isn't always the best mortgage. When we compare renewal offers, we also look at:

• Prepayment privileges: how much extra you can pay each year without a penalty
• Penalty calculation: how the lender calculates the cost of breaking a fixed-rate mortgage early, which can vary widely
• Portability: whether you can take your mortgage with you if you move
• Term length: whether a shorter or longer term suits your plans for the next few years
• Collateral vs. standard charge: how the mortgage is registered can affect how easily you can switch next time

Fixed or variable?

This is one of the most common questions I hear at renewal. There's no one right answer; it depends on your budget, your comfort with payment changes and your plans. I'll give you an honest side-by-side comparison before you choose.

Switching lenders at renewal

At the end of your term, you can renew with your current lender or move your mortgage to a new one. Because your term is ending, you generally won't pay a prepayment penalty to switch.

The stress test and a "straight switch"

This is one of the bigger changes in recent years. For a straight switch, where you keep the same loan amount and amortization, federally regulated lenders no longer have to requalify uninsured borrowers under the stress test. OSFI made that change in November 2024, and insured mortgages have long had this flexibility. Lenders still review your application carefully, but it makes switching more accessible than it used to be.

If you want to add funds or extend your amortization, it's treated as a refinance, and the usual qualifying rules apply: you'll qualify at the greater of your contract rate plus 2% or 5.25%, and with prime lenders you'll need to stay within 80% of your home's value. You can learn more on my refinance page.

Costs of switching

Switching may involve legal or appraisal costs, and your current lender may charge a discharge fee. Many lenders offer programs that help cover some switch costs. Before you decide, I'll show you the real net savings, after costs, so you can make the call with clear numbers.

Using your renewal to restructure

Renewal is a natural moment to make changes without breaking your mortgage mid-term. A few common scenarios:

• Consolidating debt at renewal to avoid a mid-term penalty
• Restructuring after payment shock, if your new payment is much higher than you're used to
• Moving from a B or private lender back to a prime lender after rebuilding your credit or income
• Self-employed at renewal, when your income looks different and you want a lender that understands it (see my self-employed mortgages page)

If you'd rather keep your first mortgage as is and just access some equity, a HELOC or second mortgage may be worth comparing too.

Your 120-day renewal checklist

Here's a simple plan to follow once your letter arrives:

1. Note your maturity date and count back about 120 to 150 days.
2. Gather your documents: your renewal offer or current mortgage statement, photo ID, your most recent property tax bill, income confirmation (recent pay stubs and an employment letter, or Notices of Assessment if you're self-employed) and your home insurance details.
3. Think about the next few years. Are you staying put, moving, renovating or growing your family?
4. Book a review. I'll shop 50+ lenders and compare rates, terms, prepayment privileges, penalties and portability.
5. Lock in a rate hold so you're protected if rates move.
6. Decide with confidence. If staying with your lender is best, I'll tell you. If switching makes sense, I coordinate with the new lender and your lawyer so funding happens on your maturity date.

For most residential mortgages with qualified borrowers, my service costs you nothing, because the lender pays my compensation. You can read more on my mortgage renewal page.

Frequently asked questions

When should I start my mortgage renewal?

About 120 to 150 days before your maturity date. Most lenders hold a rate for up to 120 days, which gives you time to compare.

Is there a penalty to switch lenders at renewal?

Generally there's no prepayment penalty at maturity. There may be legal, appraisal or discharge costs, and some lenders help cover these.

Do I need to pass the stress test to switch lenders?

Not for a straight switch with the same loan amount and amortization. Adding funds or extending your amortization means you'll need to qualify.

Can I add money to my mortgage at renewal?

Yes, but it's treated as a refinance, so you'll need to qualify and stay within 80% of your home's value with prime lenders.

Before you sign, let's talk

A short conversation can tell you whether your renewal offer is competitive or whether there's a better fit out there. Book a free call with me, ideally before you sign anything, and let's make sure your next term works for you.