- Start comparing four to six months before your term ends.
- Renewal is the easiest time to switch lenders without a prepayment penalty.
- An independent mortgage agent can compare offers from many lenders at once.
1. Start four to six months early
Many lenders will hold a rate for up to 120 days. Starting early gives you time to compare offers and lock in a rate before your term ends, without being rushed into signing whatever arrives in the mail.
2. Read your renewal letter closely
Note the rate, term, payment and any changes to your prepayment privileges. The first offer isn't always the lender's best. Treat it as a starting point.
3. Compare more than one lender
At the end of your term you can usually switch lenders without a prepayment penalty. A mortgage agent can compare banks, credit unions and monoline lenders at once, often at no cost to you.
4. Rethink your term and rate type
Your life and the market have changed since you last signed. Consider whether a fixed or variable rate, and a shorter or longer term, fits your plans for the next few years.
5. Know what switching involves
Switching usually means a new application, income documents and sometimes an appraisal. Some lenders cover legal and appraisal costs on a straight switch, so ask your agent what applies.
This guide is general information, not financial advice. Rules and programs change; an independent, licensed mortgage agent can confirm what applies to you.