Before your mortgage reaches its maturity date, most lenders will send out a renewal offer with various terms and rates. All you have to do is sign and send it back to them and your mortgage is automatically renewed. In some situations, if you don't respond they will automatically renew you into a small term, such as 6 months or 1 year. Most lenders will not do this until the very last minute and then try to pressure you to sign the renewal as there is a time limit. This is of course done so that you will not have time to shop your mortgage and may just sign the renewal without trying to negotiate a better deal. According to CMHC statistics 50% of all consumers renewing do not shop around for a better deal and simply take the first deal offered by their lender.

As easy as this all sounds, the rates offered to you at your renewal are usually the posted rates which are much higher than the discounted rates offered by many lenders. They are much higher than what they would be if you were a brand new client. It hardly seems fair that just because you are not a new client that you do not deserve the same treatment, especially considering you have your mortgage with that institution already. The interest rate that the lenders usually offer at renewal is approximately 1% higher than what you could get by going through a mortgage broker. Over the course of five years, that 1% difference can save you thousands of dollars in interest!

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