Is your mortgage coming up for renewal soon? Did your lender contact you and get you to lock in a rate four months earlier at what seems like a smoking rate? Some lenders, on the other hand, won’t send out renewal information until the last minute which seems like a ploy to give you little time to go elsewhere and get a better product – ie. just four weeks before renewal time. Cheeky, no?

When that renewal notice finally does come in the mail, it says something like – “Please indicate which option you are accepting by signing your initials in the appropriate area indicated and return your signed agreement”.

You could just initial the 5-year fixed rate — for the princely rate of 4.79%.

There are also some guarantees that if rates drop prior to your renewal date, you will get the lower rate. That’s great! So It’s going to drop 150 – 200 basis points to align with other lenders?

This is a full 2% higher than what you could actually going to get somewhere else. If you had a $500,000 mortgage, this would cost me $47,600 more over 5 years by ‘just signing here’ vs. going to a mortgage broker three months in advance.

If you are in this situation, the first thing you should do is call your lender and ask if they’ve sent out the right information. You’d be surprised how quickly they drop your rate to a “special, unadvertised rate” with little negotiation.

Doing the math, that phone call, using the same $500,000 example, would have saved you $42,800 over 5 years. That is a pretty valuable phone call.

Remember, over 70% of Canadian mortgage holders just sign on the dotted line come renewal – don’t be one of those people. Just think of the money you’re throwing away.

Please do not automatically sign the friendly mortgage renewal form. At a minimum call to negotiate or call a mortgage broker to get the best deal for you. If you feel some sort of loyalty to your current mortgage provider, then be sure to see someone in person and ask for the very best rate that they give their very best customer. Your future net worth will be glad that you did.