Short answer: At renewal you can accept your lender’s offer, negotiate it, or switch lenders with no penalty. Start four to six months before your term ends. Since November 2024 you don’t need to pass the stress test to switch lenders if you keep the same balance and amortization. Bank renewal letters are rarely their best rate, so compare before you sign.
When your term is coming up, it’s easy to think, “We’ve been paying it fine, I’ll just sign whatever the bank sends.” For many homeowners navigating mortgage renewal in Calgary, that’s exactly what happens, and they leave money and flexibility on the table.
What Is a Mortgage Renewal?
Your term (usually one to five years) is shorter than your amortization (usually 25 or 30 years). When the term ends, you renew for another term, pay it off or sell. Renewal is when you reset your rate, term and features.
When Does Renewal Happen?
Your lender must send a renewal offer at least 21 days before your term ends, but most send it three to four months ahead. Start exploring four to six months before maturity so you can compare without rushing.
Your Three Options
- Accept your lender’s offer.
- Negotiate a better rate or terms before signing.
- Switch to another lender with a better rate or better features.
Switching at renewal is usually simple and cheap. There’s no penalty, and many lenders cover the legal and appraisal costs.
→ Read more: Should I Stay With My Lender or Switch?
Do I Need to Qualify Again?
- Staying with your lender: no requalifying for a straight renewal.
- Switching lenders, same balance and amortization: since November 2024, federally regulated lenders don’t require the stress test, for insured and uninsured mortgages. The new lender still reviews your documents and some may apply their own criteria.
- Borrowing more or extending the amortization: you must qualify under current rules, including the stress test at the higher of 5.25% or your rate plus 2%.
Questions to Ask Before You Renew
1. Has your life changed?
Income up, down or less predictable? New children? Debts paid off or added? Job change, new business, retirement or separation? Your mortgage should fit your life today.
2. Fixed or variable?
Fixed gives predictable payments. Variable moves with prime and usually has smaller penalties. Choose based on your comfort with risk now, not habit.
→ Read more: Fixed vs Variable at Renewal
3. How long a term?
Shorter terms give flexibility if you might move or expect changes. Longer terms give predictability.
4. Payment and amortization
Renewal is a chance to lower your payment (more amortization or a lower rate) or raise it to become mortgage free sooner.
5. Other debts and cash flow
If you carry credit cards, lines of credit or car loans, a refinance at renewal may improve cash flow.
→ Read more: Use Your Renewal to Improve Cash Flow
6. Penalties and flexibility
Know the penalty to break (IRD on most fixed, about three months’ interest on variable), prepayment privileges and portability.
How to Get a Better Rate
- Start early, four to six months out.
- Get competing offers through a broker.
- Negotiate: tell your lender you’re comparing and ask them to match or beat it.
- Switch if another lender is clearly better.
→ Read more: Can I Negotiate My Mortgage Rate at Renewal?
What If I Miss the Date?
Most lenders auto renew you, often into a short term at a posted rate that’s higher than negotiated rates. You keep your home, but you lose leverage and may pay more.
→ Read more: What Happens If I Miss My Renewal Date?
Alberta Specifics
- No land transfer tax: switching lenders doesn’t trigger a provincial tax.
- Competitive broker market: Alberta homeowners have access to many lenders.
- Local values: Calgary property values affect your equity and refinance options.
Common Renewal Mistakes
- Signing the first offer without comparing
- Looking only at the rate
- Ignoring cash flow and other debts
- Not considering a switch
- Leaving it to the last minute
→ Read more: Top Mortgage Renewal Mistakes
Your Next Step
If your renewal is in the next six months, now is the time. Even if you stay with your lender, knowing what else is available gives you leverage. Send us your renewal letter or book a call.
Frequently asked questions
When should I start my mortgage renewal in Alberta?
Start four to six months before your term ends. Most lenders will hold a rate for up to 120 days, and your lender must send a renewal offer at least 21 days before maturity.
Do I have to pass the stress test to switch lenders at renewal?
Not for a straight switch. Since November 2024, federally regulated lenders don't require the stress test when you move the same balance and amortization to a new lender at renewal, for insured and uninsured mortgages. Borrowing more or extending the amortization still requires qualifying.
Is my bank's renewal offer negotiable?
Usually, yes. The first renewal offer is often not the lender's best rate. Comparing offers through a broker gives you leverage to negotiate or switch.
This article is general information, not personal financial advice. Rates, rules and programs change. Talk to a licensed mortgage broker about your situation. Lacroix Mortgage Group is licensed through Mortgage Connection Inc.