What to Do if You Get a Renewal Letter From Your Lender

When your mortgage term is almost up, your lender will send you a renewal letter with their offer for the next term. It’s tempting to just sign it and send it back—but that’s rarely the best move.

Why You Shouldn’t Sign Right Away

The renewal letter often isn’t the lender’s best offer. In many cases, they’re hoping you’ll sign it without shopping around or asking questions. By doing that, you might lock yourself into a higher rate or a less flexible term than what’s available elsewhere.

A Chance to Reassess Your Situation

Renewal time is more than just picking a new rate—it’s the perfect opportunity to look at your bigger financial picture. This is when you can decide if it makes sense to:

• Consolidate higher-interest debt into your mortgage

• Access equity for renovations or home improvements

• Use equity for investments or other major purchases

• Change your term or amortization to better suit your goals

[Apply here to see how you could improve your finances at renewal]

Why Shopping Around Matters

Even if you plan to stay with your current lender, getting quotes from other lenders can give you leverage to negotiate a better deal. Sometimes your lender will match or beat a competing offer—but only if you ask.

FAQ

Is there a cost to switch lenders at renewal?
Usually not, but it depends on the lender and the type of mortgage. Legal and appraisal fees, if needed, can often be covered by the new lender.

When should I start looking at renewal options?
About 4–6 months before your term ends. This gives time to shop around and make changes if needed.

Do I have to renew with my current lender?
No. You’re free to move your mortgage to another lender if they offer a better deal or terms that fit your needs.

Final Thoughts

Your renewal letter is just the starting point. Taking the time to review your options and reassess your finances can lead to a better rate, better terms, and possibly a more flexible mortgage.