7 | Mortgage Renewal in Alberta: Why You Should Never Just Sign and Send It Back
What Is a Mortgage Renewal in Alberta?
A mortgage renewal is what happens when your current mortgage term ends. You set new terms for the next period — typically a new interest rate and term length. At renewal, you can stay with your existing lender or move to a new one with no penalty. This is one of the most financially significant decisions homeowners make, and most Albertans don't give it nearly enough attention.
The Renewal Notice Problem
Here's what typically happens: your lender sends you a renewal offer — sometimes as little as a few weeks before your term ends. The rate looks acceptable. You're busy. You sign it and mail it back.
Your lender is counting on this. The renewal offer in the mail is rarely their best rate. It's the rate they think you'll accept without shopping around.
At renewal, you have the right to switch lenders entirely — with no prepayment penalty. That means there are dozens of lenders competing for your mortgage. The one who already has it knows you're a loyal customer. They're not always motivated to offer you the same rate they'd give to a new borrower.
What Changes at Renewal
When your mortgage term ends, the following can change:
Interest rate
Term length (1, 2, 3, 5 years, etc.)
Mortgage type (fixed or variable)
Lender — with no penalty, if you give proper notice
What typically doesn't change at a straight renewal is the amortization schedule and the loan amount (unless you're also refinancing). If you want to change the loan amount at renewal, that becomes a refinance, and standard qualification rules apply.
When Should You Start Your Renewal Review?
My recommendation: start 4 to 6 months before your term ends.
Most lenders will hold a rate for 90 to 120 days. Starting early means you can lock in a competitive rate while still having time to compare options and make a deliberate decision — not a rushed one.
If you wait for the renewal notice to arrive, you may only have 30 days. That limits your options significantly.
What to Review Beyond the Rate
Renewal is also a natural opportunity to reassess whether your mortgage still fits your life. Consider:
Your timeline — If you're planning to sell in the next two years, a shorter term might make more sense than locking in for five.
Your income — If your financial situation has improved significantly, you may qualify for better terms or even want to refinance instead of renew.
Your goals — Want to pay the mortgage off faster? This is a good moment to look at prepayment privileges and amortization options.
Home equity access — If you've built significant equity and have plans to use it, renewal can be combined with a refinance to restructure your mortgage.
How Switching Lenders at Renewal Works
If you decide to switch lenders at renewal, the process is simpler than most people expect:
Your broker identifies a better offer from a new lender
You submit your application and documentation
The new lender reviews your file and confirms the switch
Legal work is handled (usually covered by the new lender)
The switch happens on your renewal date — no penalty, no gap
The Stress Test at Renewal
If you're renewing your mortgage with the same lender and not increasing the loan amount or extending the amortization, you are exempt from the mortgage stress test. If you switch lenders at renewal, the stress test may apply — though if your income and finances are stable, passing it is typically straightforward.
FAQ: Mortgage Renewal in Alberta
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Absolutely. Your lender expects you to negotiate — or at least, the smart ones do. And if you come to the table with a competing offer from another lender, you have real leverage.
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No — and this is the most important thing most Albertans don't know. Switching lenders at renewal carries no prepayment penalty.
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If you don't act before your term ends, most lenders will automatically put you on a short-term open mortgage at a higher rate until you make a decision. It's not ideal — which is why starting the process early matters.
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On a $400,000 mortgage over five years, even a quarter-point difference adds up to meaningful savings. Whether switching makes sense depends on your balance and the legal/administrative costs involved — which I can help you calculate.
You mortgage doesn’t have to feel overwhelming—especially when you have someone guiding you through it.
If you’re thinking about taking the next steps (or just want to understand your options), you can book a no-pressure chat through my calendar.
We’ll go over your numbers, your goals, and what makes sense for you.
Jayne Flaig is a licensed mortgage broker at Trilogy Mortgage in Medicine Hat, Alberta, with access to more than 40 lenders. She's known for making the mortgage process feel clear, manageable, and — believe it or not — sometimes even enjoyable.