The short answer
The ten mistakes
1. Signing the offer without comparing it
The offer arrives with a rate that is not always the best available. Compare it with at least one other offer.
2. Waiting for the last week
Switching to another lender takes several weeks for the analysis and the paperwork. Past a certain point it becomes impossible to organize. See When to start comparing your renewal.
3. Looking only at the rate
The rate is only one element. The penalty, prepayment privileges and transfer fees count too.
4. Choosing a term without considering your plans
A five-year term ahead of a sale planned in two years can be costly. Choose the length from your calendar. See Choosing a term.
5. Forgetting to calculate the penalty before selling or refinancing
A fixed-rate penalty can far exceed three months’ interest. Ask for a written amount and the method. See Mortgage penalty: differential or three months.
6. Not checking the remaining amortization
The offer sometimes shows a longer amortization than the one remaining. A longer amortization lowers the payment but adds interest.
7. Ignoring the prepayment conditions
The amounts allowed each year without penalty vary from one contract to another. If you plan extra payments, that limit matters.
8. Believing that switching lenders is always complicated or costly
A switch takes documents, but not necessarily high fees. Ask about transfer fees and who covers the appraisal and the notary before you decide.
9. Negotiating without a point of comparison
Without another offer in hand, the lender has no reason to move. A written offer from another lender changes the conversation.
10. Letting the renewal happen on its own
Depending on the contract, no reply may renew the loan on the offer’s terms. Check the maturity date and what your contract provides if you give no instruction.
Frequently asked questions
How long before maturity should I start?
As soon as the offer arrives. For a switch, allow several weeks for the analysis and paperwork.
Can I renegotiate before maturity?
Depending on the contract, and breaking early may trigger a penalty. Ask for the amount before acting.