Quick Summary: If your mortgage is coming up for renewal, you don’t have to wait until the last minute to explore your options. Many Canadian mortgage lenders allow eligible homeowners to secure an interest rate up to 120 days before their renewal date. Starting early could help protect you against rising rates, give you time to compare lenders, and potentially save money on your next mortgage term.
What Is a 120-Day Mortgage Rate Hold?
A mortgage rate hold allows you to secure an offered interest rate for a specified period, often up to 120 days, while preparing for your mortgage renewal.
Here’s why that matters.
Imagine your mortgage renews in March, but you begin reviewing your options in November. If you qualify for a 120-day fixed-rate hold, you may be able to secure an available rate before your existing mortgage term ends.
If interest rates increase during that period, you may still qualify for the rate you secured, provided you meet the lender’s conditions.
If rates decrease, some lenders may allow you to take advantage of a lower rate before your renewal is finalized.
Think of it as an opportunity to protect yourself against potential rate increases without having to predict exactly where mortgage rates are heading.
Why Should You Start Your Mortgage Renewal Early?
Waiting until your renewal letter arrives could mean missing opportunities to compare mortgage options.
Starting the process approximately four months in advance offers several potential advantages.
1. Protect Yourself Against Rising Interest Rates
Mortgage rates can change unexpectedly. Securing an eligible rate hold may help protect you from increases before your renewal date.
2. Give Yourself Time to Compare Lenders
You aren’t required to renew with your current lender.
Working with a mortgage broker allows you to explore available mortgage products, compare interest rates, and evaluate terms that suit your financial goals.
3. Take Advantage of Lower Rates When Available
Depending on the lender’s policies, you may be able to access a lower rate if interest rates decrease before your renewal is completed.
It’s important to confirm these conditions when arranging your rate hold.
4. Review Your Financial Goals
Your mortgage renewal is also an opportunity to evaluate your finances.
Perhaps you want to adjust your payment schedule, pay down your mortgage faster, or explore different mortgage terms.
Starting early gives you time to make an informed decision rather than rushing into another mortgage agreement.
Does Holding a Mortgage Rate Mean Renewing Early?
Not necessarily.
A mortgage rate hold and an early mortgage renewal are two different things.
With a rate hold, you may be able to secure an interest rate for your upcoming renewal while keeping your existing mortgage in place until its maturity date.
Renewing your mortgage before the current term ends could involve different conditions, fees, or penalties.
This is why reviewing your options with a mortgage broker is important before making changes to your existing agreement.
When Should You Contact a Mortgage Broker About Renewal?
A good starting point is approximately 120 days before your mortgage renewal date.
However, you can begin discussing your options even earlier, particularly if your finances have changed or you’re considering switching lenders.
Not every lender offers a 120-day rate hold, and approval requirements vary.
Don’t Wait Until Your Mortgage Renewal Date
Your mortgage is one of your biggest financial commitments. Giving yourself more time to review your renewal options could make a meaningful difference.
Allison Kehler-Tolley, a mortgage broker in Lethbridge, Alberta, can help you explore available mortgage renewal rates, compare lenders, and find a solution that fits your needs.
If your mortgage renews within the next four to six months, now is a great time to start the conversation.
Contact Allison Kehler-Tolley today to review your mortgage renewal options before your current term expires.
Rate holds are subject to lender availability, eligibility, approval, and specific conditions. Rate holds do not guarantee mortgage approval or access to a lower rate.
