More than 1.2 million Canadian mortgages are up for renewal this year, and for many clients, that means tough choices. With roughly 85% of those loans originated during the ultra-low-rate pandemic period, most borrowers will renew at higher rates, even as the Bank of Canada’s current rate-cutting cycle advances. According to Royal LePage, 57% of homeowners facing renewal expect their payments to rise, and 81% say the increase will strain their household finances. For financial advisors, this presents a timely opportunity to guide clients through complex mortgage renewal decisions while preserving cash flow and protecting long-term wealth.

Start Early and Frame Renewal as a Strategy

Mortgage renewals shouldn’t be treated as an administrative task. Encourage clients to start planning 4–6 months before renewal so they can evaluate options with their advisor without deadline pressure. Early planning gives advisors time to review household cash flow, budget impacts, and whether refinancing, renewing with their current lender or switching lenders makes sense. With bond yields falling and the BoC signalling a gradual path toward a neutral rate range, early renewals or shorter terms can position clients for flexibility as rates decline further. Although shorter terms or floating rates come with their own set of risks, if higher rates don’t recede as expected.

Advisor Messaging: “A renewal isn’t just about rates, it’s a strategy checkup on your entire financial plan.”

Shop Beyond Their Lender

At renewal, clients often receive an automatic offer from their existing lender, but rarely the best one. Typical estimates suggest that the average 5-year fixed-rate borrower could save about $1,800 annually by switching to the market’s lowest rate instead of accepting their bank’s default renewal offer. As their advisor, help clients compare offers and weigh the real costs of switching, including discharge fees, appraisals (if necessary), and new qualification requirements. Many lenders now cover these costs to attract qualified switch borrowers, especially those with strong credit and stable income.

Advisor Tip: Compare total borrowing costs, not just rates. Add up all fees, then divide by annual savings to show clients how quickly they can break even.

Understand When the Stress Test Applies

The federal stress test, which qualifies borrowers at the higher of 5.25% or the contract rate + 2%, isn’t automatically triggered at renewal. If a client renews with their existing federally regulated lender and doesn’t change their amortization or loan amount, they typically avoid requalification. However, switching lenders, extending amortization, or refinancing to access equity may, in many cases, reintroduce the test. Advisors should assess whether the rate savings from switching justify the requalification risk, particularly for retirees or those who foresee changes in income during qualification.

Advisor Messaging: “Avoid unnecessary stress—literally. If your mortgage fits your plan, renew in place to skip the stress test.”

Leverage Renewal as a Debt Management Opportunity

A renewal is one of the few penalty-free opportunities for borrowers to reframe their entire debt picture. If clients carry high-interest credit card or personal loan balances, they can consolidate them into their mortgage, reducing interest costs and simplifying repayment. Encourage them to align their amortization period and payment schedule with their broader financial plan. For example, switching to accelerated biweekly payments or adding small prepayments can shave years off amortization without significant cash flow strain.

Advisor Messaging: “Your mortgage renewal is a chance to reset, not just your rate, but your entire debt plan.”

Use Term Selection to Match Economic Conditions

Fixed-rate borrowers who locked in during the 2023–2024 rate hikes may be renewing into a softening environment. A shorter fixed term (2–3 years) or a well-structured variable rate may let clients capture lower rates sooner. Conversely, clients craving stability, especially retirees on fixed incomes, may benefit from a longer fixed term at today’s still-competitive rates. Advisors should discuss both paths, stress-test each, and quantify how small changes in term length affect cash flow and long-term interest paid.

Advisor Tip: Create a simple “2-Year vs 5-Year” comparison table to visualize total cost differences under various rate paths.

Highlight Qualification and Documentation Costs

Switching lenders usually means a new appraisal and updated income documentation. Appraisals typically cost $150–$500, though many lenders cover this to earn new business. Discharge and legal fees can add up to $1,500, depending on the province and mortgage registration type. Advisors can help clients plan liquidity ahead of renewal to cover these costs, or they can use lenders offering cash-back promotions to offset them.

Advisor Messaging: “Yes, switching can cost a few hundred dollars, but the savings often start paying back within months.”

Prepare Clients for Payment Shock Before It Happens

With 50% of borrowers expecting higher payments this year, clients should simulate that increase now. Advisors can run a “payment shock” exercise using nesto’s renewal payment shock calculator. Our calculator runs scenarios based on expected payment increases of 20–25% to mimic likely renewal terms and reallocate the difference into a high-interest savings account. This scenario-building exercise allows clients to adjust their budgets and expectations before the higher payments arrive. It builds a lump-sum reserve they can apply at renewal to reduce the balance, or set aside to cover those higher monthly payments.

Advisor Messaging: “Try your future payment now. If it fits, you’ll renew with confidence; if not, we can fix it before renewal.”

Coordinate Mortgage Renewal With Overall Financial Planning

Integrating mortgage strategy into the client’s whole plan strengthens both debt and wealth outcomes. Advisors can use renewals to realign investment, tax, and retirement strategies. For example, if rates are high but expected to drop, maintaining liquidity for future lump-sum prepayments may be wiser than locking in a 5-year term. If the client’s risk tolerance has changed, the advisor can coordinate between mortgage flexibility and investment time horizons.

Advisor Tip: Position renewals as an annual planning touchpoint, similar to RRSP contributions or protection strategy reviews.

Educate Clients on Product Differences

Collateral mortgages, hybrid loans, combination loan plans (CLPs) and bundled HELOCs may limit transferability and flexibility. Advisors should review the client’s existing mortgage structure before recommending a switch. If it’s a collateral charge, explain potential discharge costs and requalification requirements. Many borrowers aren’t aware of these differences until they attempt to move lenders, creating unnecessary friction at renewal.

Many borrowers are unaware of the differences among the types of floating mortgages, as lenders tend to market them all as variable mortgages. Variable (VRM) and adjustable (ARM) mortgages come with their own set of risks and benefits. Either or both may not be suitable for your client’s financial circumstances, as many representatives at banks don’t even know how to differentiate them, as they’re not mortgage experts but generalists.

Advisor Messaging: “Know what you signed before you switch, some mortgages are riskier and stickier than others.”

Create a Client Renewal Game Plan

Turn renewals into a recurring service line within your financial practice. Develop a 90-day renewal workflow that includes:

• A rate and term review at day 90
• A cash flow stress test at day 60
• A refinancing or switch comparison at day 45
• Final negotiation and payout request from the current lender at day 30

Offer this as part of your ongoing planning relationship or as a value-added review for dormant clients.

Advisor Messaging: “Mortgage renewals are predictable. Let’s make your outcome predictable, too.”

With $800 billion to $1 trillion in renewals hitting between now and 2027, now’s the time to help your client. Partner with nesto mortgage experts to deliver data-driven renewal strategies that help clients save thousands, manage payment shock, and align debt with long-term financial plans. Together, we can turn renewal anxiety into renewed financial confidence.

Partner with nesto mortgage experts to integrate personalized financing solutions into your client strategies. Together, we can make responsible borrowing a cornerstone of long-term wealth creation and foster client confidence.

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Why Choose nesto

At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned, salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.

nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.

Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.

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