Negotiation script · Mortgage renewal
Mortgage renewal negotiation script
A renewal statement is an offer, and it is usually open to discussion. A federally regulated lender must send it at least 21 days before your term ends, and at the end of a term you can move to another lender without a prepayment penalty, although switching costs can apply. That gives you a fair, factual reason to ask for a sharper rate. This script keeps the call polite and specific: you share the offer you received, the written quote you have from elsewhere and the gap in dollars, then ask what your lender can do. Grade your offer first in the renewal checker.
Score the offer first
The conversation
Adapt the wording to your situation. Be accurate about any competing quote you mention.
- You
Hi, I received my renewal statement and I'd like to talk about the rate before I sign anything. I'm calling about a five-year fixed renewal.
Tip: Open with what you want to discuss. There is no need to apologize for asking.
- Lender
Sure, I can look at that. The offer on file is 4.69% for a five-year fixed term.
- You
Thanks. I compared that offer with the Bank of Canada's average rate on new fixed mortgages, and I also have a written quote from another lender at 4.39% for the same term and amortization.
Tip: Only mention a quote you actually have in writing. Accuracy is what makes the request credible.
- Lender
Other lenders sometimes advertise rates with conditions attached. Can you tell me more about that quote?
- You
It's a five-year fixed, same amortization, and I can send you a copy. On my balance the difference is about $63.57 a month and $5,618 in interest over the term, so it matters to me.
Tip: Dollars over the term land better than "a quarter point". The example below shows how the figures are worked out.
- Lender
Let me see what I can do. I may need to check with my manager or our retention team.
- You
I appreciate that. I'd prefer to stay if the rate is competitive. Can you tell me the most competitive rate you're able to offer on this renewal?
Tip: Saying you would like to stay is honest and gives the lender a reason to work with you.
- Lender
I can bring the five-year fixed down from the original offer. I'll send the updated figure in writing.
- You
Thank you. Could the written offer also show the term, the payment, the prepayment privileges and how a prepayment penalty would be calculated?
Tip: A lower rate with worse penalty terms may not be a better deal. Ask for the full picture.
- Lender
Yes, all of that will be in the renewal documents I send you.
- You
Great. I'll compare it with the other quote and get back to you before my term ends.
Tip: You don't have to decide on the call. Leave time to compare before the renewal date.
| At 4.69% | At 4.39% | |
|---|---|---|
| Monthly payment | $2,561.97 | $2,498.41 |
| Interest over 5 years | $85,402 | $79,784 |
| Balance after 5 years | $331,683 | $329,880 |
If they say no
“"That's the rate we offer everyone at renewal."”
"I understand. I have a written quote for the same term at 4.39%. Is there anyone else, such as a retention team, who can review the rate before I decide?"
“"Switching lenders costs money, so it won't be worth it."”
"That's a fair point, and I've asked the other lender which switching costs it would cover. On my numbers the rate gap is worth about $5,618 over the term, so I'm comparing the two on total cost."
“"You'll have to pass a new qualification to move."”
"I'm checking that with the other lender. In the meantime, can you tell me what you could offer if I renewed with you today?"
“"I can only do that rate on a different term."”
"Thanks for the option. Could you put both offers in writing, with the rate, term and penalty terms for each, so I can compare them properly?"
“"The offer is only good if you sign today."”
"I'd like to see it in writing first. The renewal statement says the rate won't increase before my renewal date, so I'll review it and get back to you before then."
After the call
- Get any new rate in writing before you sign, with the term, payment and renewal date.
- Re-grade the revised offer in the renewal checker and compare it with your other quote.
- Compare total cost, not just the rate: use the renewal switch calculator to weigh switching costs against interest saved.
- Check the prepayment privileges and how the penalty is calculated in the information box at the start of the agreement.
- Note the date your term ends, and decide before then so the lender doesn't renew automatically on the original terms.
Questions people ask
Can I negotiate my mortgage renewal with my current lender?
Yes, you can ask. A renewal statement is an offer, and it is reasonable to ask whether it can be improved. A written competing quote and the dollar value of the gap give you a clear, factual basis for the request.
When does my lender have to send the renewal statement?
A federally regulated lender, such as a bank, must send it at least 21 days before the end of your term. It must also tell you at least 21 days ahead if it won't renew. The renewal letter guide explains each line.
Is there a penalty for switching lenders at renewal?
There is no prepayment penalty at the end of the term, but switching can involve discharge, registration, transfer, appraisal or administration fees. Ask the new lender whether it will cover some or all of them, and compare totals with the renewal switch calculator.
What if my lender renews automatically?
If the lender plans to renew automatically, the renewal statement says so. Reviewing the offer and negotiating before the end of your term lets you choose the terms rather than accept the default.