I get it. Life happens. The kids need new cleats, work is busy, and before you know it, that thick envelope from your lender sits unopened on the kitchen counter for weeks. Or maybe you saw the email and thought, “I’ll deal with it later.” But here’s the thing—ignoring your mortgage renewal package can cost you big time. Let’s talk about what really happens when you don’t respond to your lender’s offer, and why taking action (even just a small one) can save you thousands.
What Is a Mortgage Renewal Package?
Why People Ignore Their Renewal Offers
What Happens If You Do Nothing?
Do You Get Penalized for Not Responding?
When Should You Follow Up If You Haven’t Received It?
When Should You Start Shopping for a Better Mortgage?
What Is a Mortgage Renewal Package?
When your mortgage term is coming to an end (usually 5 years), your lender will send you a mortgage renewal package about 21 to 30 days before the maturity date, and don’t expect a follow-up call. Credit Unions are often better, sending out their renewal notices up to 60 days before and usually with more personalized communication. Some lenders just send out a quick email.
Your mortgage renewal package outlines your new proposed rate, the term options, and the monthly payment moving forward. You usually have to sign it and return it if you want to accept the offer. Simple, right? Well…
Why People Ignore Their Renewal Offers
You’re not alone if you forgot, delayed, or just plain ignored the letter. Common reasons I hear from clients include:
- “I thought my payments would just keep going.”
- “I didn’t realize I needed to sign anything.”
- “I assumed it was the best rate they could offer.”
- “I never got the letter.”
Sometimes, it genuinely gets lost in the shuffle. Other times, people think it’s automatic or not a big deal. But here’s the catch: it might not be the best deal on the market.
What Happens If You Do Nothing?
If you don’t respond to your lender’s renewal package, most lenders will automatically roll you into a new mortgage term to keep things going. Sounds convenient, right? But here’s the kicker: the rate they default you into is usually much higher, often an open one-year term at posted rates (not discounted).
This means:
- You’re paying more interest, sometimes hundreds more per month
- Your term is open, so you can leave any time without a penalty (that’s the silver lining)
- You lose the opportunity to negotiate a better deal or shop around
And if your lender defaults to a closed term (some do), you could get locked into a high rate and face a prepayment penalty if you want out later.
Do You Get Penalized for Not Responding?
No, not in the traditional sense. Ignoring your renewal doesn’t trigger an IRD or 3-month interest penalty like breaking a mortgage early would. But it does cost you in another way: opportunity loss.
Every month you stay in that expensive open term is money that could have been saved or invested elsewhere. Plus, you give up leverage. Once that renewal term starts rolling, the lender knows you’re on autopilot. There’s little incentive for them to offer a better deal after the fact.
When Should You Follow Up If You Haven’t Received It?
If you’re within 30–60 days of your maturity date and you haven’t heard a peep from your lender, pick up the phone or check your online banking portal. Sometimes they send it digitally, sometimes by mail. And sometimes—let’s be honest—things slip through the cracks.
When Should You Start Shopping for a Better Mortgage?
A good rule of thumb: start reviewing options at least 120 days before renewal. That’s when most lenders will hold rates and you can really start exploring alternatives. This gives you time to:
- Compare options
- Requalify if needed
- Coordinate appraisals or docs
- Strategically negotiate with current lender
By starting at least 120 days before renewal, time is on your side. Your present lender doesn’t want you to have time to shop around. By law (see FCAC Guideline: Mortgage Repayment and Renewal Disclosure) “If a mortgage is eligible for renewal, the federally regulated financial institution must provide the borrower with a renewal statement at least 21 days before the end of the existing term.”— Financial Consumer Agency of Canada (FCAC).
But 21 days is not very much time, which is why you need to be proactive.
General rule of thumb is:
30+ days before maturity? You have lots of options and leverage
15-20 days? Still doable, but its all hands-on deck and you better be able to deliver those docs fast!
Less than 10 days? Risky. It’s now on rush basis and many lenders will simply not accept the file. You may be forced to default into your current lender’s higher renewal rate… OUCH!
Allen’s Final Thoughts
Renewal time is one of the few windows in the mortgage world where you have full control with zero penalties. But it only works if you take action. Ignoring that letter might seem harmless, but it could cost you thousands over your next term. Whether it’s reviewing your lender’s offer or switching to a better one, the most expensive decision is often doing nothing.
How I Can Help
As a mortgage agent, I’m here to advocate for you. I can:
- Review your lender’s renewal offer and show you how it compares to the rest of the market
- Help you switch lenders with no penalty and minimal paperwork
- Re-amortize your mortgage if needed to lower payments
- Add or remove a co-borrower, or consolidate debt during renewal
- Lock in rates early so you’re protected if the market shifts
Don’t let your renewal package collect dust. Give me a call, send me a message, or book a 15-minute strategy session. Your next mortgage move should work for you, not just your lender.
