Mortgage Renewal in Halifax: Send Me Your Renewal Letter Before You Sign

Don't sign your bank's renewal letter until someone checks it

A renewal letter is an offer, not a bill. It's written by your lender, for your lender. That doesn't make it a bad offer, but it does mean nobody on the other side is comparing it to the rest of the market for you.

Here's the part many homeowners miss: if you don't act, your mortgage may renew automatically. If your lender plans to auto-renew you, it has to say so in the renewal statement. Auto-renewal is convenient, but it can mean you don't get the best rate or terms available to you.

Signing quickly feels responsible. Pausing for a second opinion usually costs you nothing but a phone call.

When your renewal letter shows up (and why that's late)

If your mortgage is with a federally regulated lender, such as a bank, it must send you a renewal statement at least 21 days before your term ends. It must also tell you at least 21 days ahead if it won't renew your mortgage. This 21-day rule applies to federally regulated lenders only.

Twenty-one days is the minimum, not the ideal. The Financial Consumer Agency of Canada recommends you start shopping a few months before your term ends and not wait for the letter.

Many lenders let you start the process and hold a rate several months before your renewal date. The exact window depends on the lender, so the best time to call me is as soon as your renewal is within about four to six months, even if no letter has arrived yet.

Not sure if your lender is federally regulated? Many Nova Scotians have mortgages with credit unions or other provincially regulated lenders, where the rules can differ. Either way, the earlier you start, the more options you have.

3 things to check before you sign

1. The rate, the term, and the type. Your renewal statement must show your interest rate, term, payment frequency, remaining balance and any fees. Ask yourself: is this term and rate type (fixed or variable) still right for where your life is going in the next few years? Planning to sell, renovate or add a renter? That changes the answer.
2. The amortization and the payment. If your payment drops at renewal, check whether your amortization was extended. A longer amortization lowers your payment but can add thousands, or tens of thousands, in interest over time. Lower isn't always better.
3. The fine print you'll live with. Look at prepayment privileges, penalties for breaking the term early, whether the mortgage is portable, and how it's registered (standard charge or collateral charge). A collateral charge can make switching later more involved, so it's worth knowing which one you have before you lock in another term.

Not sure what you're looking at? That's what the review is for. Email your renewal letter to rahul@activemortgage.ca or book at /book.

Your renewal rate is negotiable, and you can switch lenders

You don't have to renew with the same lender. At the end of your term, you can move your mortgage to another lender if their terms suit you better. You can also negotiate with your current lender. If you have an offer from another lender or a broker, your current lender may be willing to improve its offer, and it may ask for proof.

What switching involves (so there are no surprises):

• A new application. The new lender has to approve you, and it may use different criteria than your original lender. On a straight switch (same loan amount, same remaining amortization), you may not have to re-qualify at the stress-test rate, depending on your mortgage and lender. The new lender still reviews your income, credit and property.
• Possible costs. There can be discharge, registration, transfer or assignment fees, a possible appraisal, and legal fees. Some lenders cover some or all of these on a switch. We'll confirm what applies to you before you decide.
• Mortgage default insurance. If your mortgage is already insured, we'll make sure the new lender has your insurance details so you don't pay a premium twice. Increasing the loan or extending the amortization can change this.
• Signing. You'll sign new registration documents, usually with a lawyer.

As a broker I work with 50+ lenders, so I can compare options for your file rather than one lender's rate sheet. Sometimes the answer is to stay. The point is that you know.

Why "the Bank of Canada held" doesn't mean your renewal rate will

The Bank of Canada sets its policy rate, which most directly affects lenders' prime rates and therefore variable-rate mortgages and lines of credit.

Fixed mortgage rates work differently. They're generally priced off Government of Canada bond yields, which move every trading day based on what markets expect. That's why fixed renewal offers can rise or fall even in a month when the Bank of Canada does nothing.

What this means for you: don't time your renewal around headlines. Start early, compare offers, and choose the rate type that fits your plans and your comfort with payment changes. I don't predict rates. I help you make a decision you're comfortable with whatever they do.

Renewing after a 2020–21 mortgage: planning for payment shock

If you bought or last renewed in 2020 or 2021, you may have locked in at a rate lower than many of today's renewal offers. That can mean a noticeably higher payment when your term ends, even if nothing else in your life has changed.

If that's you, it's even more important to start early. Options can include choosing a different term or rate type, adjusting your payment frequency, using your prepayment privileges before renewal, or, in some cases, consolidating higher-interest debt. Each one has trade-offs, especially stretching your amortization, so we'll look at the total cost, not just the monthly payment.

Breaking your mortgage early: IRD vs three months' interest

Sometimes the question isn't "should I renew?" but "should I get out of my mortgage before my term ends?" That's when prepayment penalties come in. Here's how they usually work, in plain language:

• Three months' interest. This is the simpler penalty: roughly what you'd pay in interest over three months on the amount you still owe. Closed variable-rate mortgages commonly use this.
• Interest rate differential (IRD). This is common on closed fixed-rate mortgages. It's based on the gap between your mortgage rate and the rate your lender offers today for a term similar to what you have left, often adjusted for any discount you got when you signed. The lender is recovering some of the interest it expected to earn.
• For closed fixed-rate mortgages, the penalty is usually the higher of the two. IRD is more likely to apply when your rate is higher than current rates and there's a lot of time left on your term.

How IRD is calculated varies from lender to lender, and lenders must explain their method and give you a written statement of the penalty if you ask to prepay. Before breaking a mortgage, get the actual penalty figure from your lender in writing. I'll then help you weigh it against what switching or refinancing could do for you. Often the answer is to wait until renewal, sometimes it isn't. Either way, it should be a calculated decision, not a guess.

Self-employed or paid on commission? Start earlier

If you run your own business or your income varies, renewal is usually simple if you stay with your current lender. Switching to a new lender means a new application, and that means documenting your income again, which can take more time for self-employed and commissioned borrowers.

Get ahead of it: have your recent tax returns and Notices of Assessment ready, and give yourself extra lead time before your term ends. Learn more on my self-employed mortgage page.

Renewing as a couple

Renewal is a good time to check that your mortgage still fits both of you. Maybe one of you changed jobs, went on parental leave, started a business, or you're planning a renovation or a move. Those changes can affect which term and rate type make sense, and whether switching lenders is straightforward.

If your situation has changed in a bigger way, such as a separation or adding or removing someone from title, tell me early. That's no longer a simple renewal, and it needs more time and possibly legal advice.

The easiest way to start: both of you join a short call and we go through the letter together. Book a call.

How the renewal review works

1. Send me your renewal letter, or book a call. Email your renewal letter to rahul@activemortgage.ca or book at /book. Or call or text 902-223-8003.
2. I review it. Rate, term, amortization, fees, prepayment privileges, penalties and how your mortgage is registered.
3. I compare. I look at what other lenders may offer for your situation and what switching would involve.
4. You decide. Sign your lender's offer, negotiate it, or switch. No pressure and no obligation.

If you're thinking about renovating, consolidating debt, or buying your next home in the next few years, renewal is a good moment to talk about that too. See also: Halifax mortgage broker, Renew, refinance, or switch lenders and why use a mortgage broker.

Mortgage renewal FAQ