Don't sign the first letter.

Switching lenders at renewal is straightforward. The process involves a new mortgage application where the new lender will verify your income, credit, and property details. Unlike refinancing mid-term, there are typically no prepayment penalties. Many new lenders will even cover the legal and administrative costs associated with the switch, making it a simple and cost-effective process.

The ideal time to start planning your renewal is 4 months (120 days) before your current term expires. This gives you ample time to check your credit score, gather documents, and shop for the best rates. Most lenders offer a 120-day rate hold, which means you can lock in a great rate today, completely protected if market rates happen to rise before your renewal date.

Yes, many lenders allow you to renew early, often within the last 120 days of your term, without a penalty. If you find an exceptional rate offer well before your renewal date, you can also do an 'early renewal,' which involves blending your old rate with the new one or paying a small penalty. This can be a smart move if current rates are significantly lower than what's forecast for the future.

A renewal is simply signing on for a new term on your existing mortgage amount. A refinance involves breaking your current term to create a new, larger mortgage to access your home's equity. If you only want a better rate, a renewal (or switch) is your goal. If you need to take cash out, you need to refinance.