What Your Bank Won't Tell You at Renewal | Canada

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Financial institutions in Quebec regularly omit several pieces of information at renewal. They won't tell you that you can transfer free of charge at maturity to a better lender. They won't mention that their posted renewal rate is negotiable downward. They won't inform you that OSFI's stress test doesn't apply at simple renewal with the same lender. They won't specify that their IRD calculation using posted rates significantly inflates future penalties. They won't spontaneously offer cash-back that other lenders provide. An AMF-certified broker reveals this information and protects your interests in accordance with the LDPSF. An AMF-certified mortgage broker in Quebec analyzes your situation free of charge and compares offers from multiple lenders to get you the best available conditions. The LDPSF requires them to act in your best interest, ensuring professional and objective advice to optimize your mortgage.

The 6 Things Your Bank Won't Tell You

Financial institutions are obligated not to mislead you, but they are not obligated to inform you of everything that could benefit you at a competitor.

1. You can transfer free of charge at maturity to a better lender
2. Their posted renewal rate is negotiable (0.10-0.50% margin)
3. OSFI's stress test doesn't apply at simple renewal with the same lender
4. Their IRD calculation method (posted rates) inflates your future break penalties
5. Other lenders offer 0.5-1% cash-back on the balance
6. An AMF broker obtains preferred rates unavailable at the branch

Renewal is the only time you can switch lenders with no penalty. Don't waste this opportunity.

Renewal in the Quebec Context

Mortgage renewal in Quebec represents a major financial opportunity that too many homeowners underutilize. Approximately 60% of borrowers accept their bank's renewal offer without comparing, paying on average $2,500 to $7,500 more in interest per 5-year term. In Quebec, major banks (RBC, TD, BMO, Scotia, NBC, CIBC) and Desjardins credit unions generally send a renewal offer 21 to 30 days before maturity, a timeline often insufficient for adequate shopping. This is why experts recommend starting the process 4 to 6 months before maturity. Most lenders offer a 90 to 120 day rate hold, allowing you to lock in an advantageous rate while continuing to compare available market offers.

Maximizing Your Renewal: A Proven Strategy

To get the most from your renewal, adopt a strategic and methodical approach. Start by checking your credit score with Equifax and TransUnion six months before maturity. A score of 680 and above gives you access to the best rates at A-lenders. Correct any errors and pay credit card balances below 30% of the limit to optimize your score. Contact an AMF-certified broker four months before maturity to get the best market offers and a 120-day rate hold. Compare at least 3 to 5 detailed offers analyzing not only the rate but also prepayment conditions, portability, IRD calculation, conversion options, and cash-back incentives.

Protecting Your Interests at Renewal

Renewal is your mortgage freedom moment: no penalty applies and you can transfer free of charge to a better lender. Do not let inertia cost you thousands of dollars. In Quebec, an AMF-certified broker is your best ally in this process: they have access to preferred rates from multiple lenders, their service is free for borrowers, and the LDPSF requires them to act in your best interest. Take the time to compare, negotiate, and verify every clause before signing your next mortgage contract.

Frequently Asked Questions

Why doesn't my bank inform me?

Banks maximize their margins. A client who signs without comparing is more profitable for the institution.

Is the transfer at maturity really free?

Yes. At maturity, no penalty. The new lender often absorbs notary fees.

Why is the IRD calculation important?

An IRD calculated on the posted rate (vs contractual) can double or triple your penalty if you need to break later.

Does my bank offer cash-back?

Rarely spontaneously. But if you threaten to leave, the retention team may offer incentives.