Highlights:
- My step-by-step process to get the best mortgage rate I can find
- What to do before talking to a mortgage advisor
- How my mortgage freed up more money to invest
It’s mortgage renewal season for me - and maybe for you, too!
With over 60% of all mortgages in Canada due to renew in 2025 and 2026, mortgage rates are a hot topic.
And they should be - the cost of having a roof over your head can affect your entire financial picture.
Our homes are one of the single biggest financial assets most of us will ever own. The lower the rate, the more money we have left to invest and enjoy life with.
For me, it’s worth spending time to get the best rate I can. Here’s what I did, so you can do the same!
My numbers
How much: We have $325,000 left on our mortgage
Rate: 3.95%
Term: 5 years
Amortization: 20 years
Once our new mortgage contract comes into effect we’ll pay just under $2000 a month.
Step 1: I got the lay of the land
Before even checking rates, I wanted to get a sense of what people are doing right now.
I posted in a personal finance Facebook group and asked for feedback from mortgage experts and people who’d recently renewed.
A few mortgage advisors chimed in, and the consensus was that most people are going with 5-year terms right now.
Even though variable would be cheaper, there’s so much uncertainty in the world that anything could happen over 3-5 years. The rates are low enough that a 5-year term could be worth it for peace of mind.“Especially if you can get anything under 4%, it’s worth locking in.”
I also got to see what other homeowners were actually signing at, which gave me a solid sense of the current landscape.
Step 2: I compared rates
I checked the big banks and sites like Nesto, Ratehub, and True North Mortgage to see what they’d offer me.
To get a better idea, I filled out short online forms - not a full application, and I didn’t talk to anyone directly. I just wanted a quick way to get a clear benchmark.
Step 3: I talked to my advisor
At this point I was ready to talk to my mortgage advisor. Since we’ve worked together for years, he knows I’m the type to shop around and negotiate.
He immediately offered me the “floor rate” which was far better than anything else I’d seen.
I’d normally use this as a bargaining tool
Usually I’d use that rate as leverage - go back to the other lenders I checked earlier, see if they can beat it, and then return to my advisor for a final round.
But since the rate he offered was so much lower than anything else I’d seen, I figured other lenders wouldn’t even try to beat it.
Since so many mortgages are up for renewal right now, it’s one of those rare times when renewal rates are actually better than what new clients are getting.
He said, “If you can find a better rate, go for it. I’d be surprised if you did!”
He noted my rate
He put a note in my file with the rate he offered me so I’d be able to lock it in later when I called to officially renew.
I’d have to call the general phone number for mortgage renewals, and he warned me they’d offer higher rates. He told me to have them check my file’s notes to get his preferred rate.
Step 4: I locked it in
When I called to officially renew, they first offered:
• 3-year fixed at 4.08%
• 5-year fixed at 4.18%
• 5-year variable at 3.85%
I had them check the notes on my file, and that’s how I locked in 3.95% for 5 years.
I could get an even better rate
I’ll call the day before my contract starts to see if rates have moved.
It’s just a few days before the next Bank of Canada rate announcement, and fixed rates move ahead of announcements - and since the rate is expected to come down again, I might be able to do better still.
Other things worth knowing
• You can start the renewal process up to 120 days before your term ends. This locks in a rate, and if rates drop before signing, your contract can usually be updated.
• If something sounds way too good to be true, check the fine print. Some brokers only give you the best rate if you commit to renewing with them again - and in this case, you have zero bargaining power.
• Your mortgage rate isn’t the only thing that matters. Look at the terms and benefits like prepayment privileges, the ability to double up payments, or having a line of credit tied to the mortgage.
Now I can invest the rest!
With the renewal done, I know exactly how much my mortgage payments will be - and more importantly, how much extra I’ll have left each month to put toward my investments.
That’s money I can put to work instead of spending it on my mortgage!
I use Passiv to manage our household investments and stay on track with retirement.
It makes it so easy to see our rate of return and track our investment progress.
And with one-click trades, we get all our cash fully invested in just minutes so we don’t miss a day of growth.
Get a “Forever Free” account and start using Passiv today!
