5 renewal mistakes to avoid in the 2026 renewal wave

A large share of Canadian mortgages signed in 2020 and 2021 come up for renewal this year and next. Most of the money lost at renewal is lost through habit, not bad luck.

By Gary Nagra · September 2026

Your lender sends a renewal letter a few months before your term ends. It has a rate, a term and a signature line. Signing it takes two minutes, and that convenience is exactly what it is priced for. Here are the five things I see homeowners across Greater Victoria do at renewal that cost them, and what to do instead.

1. Signing the first letter

The rate on the renewal letter is an opening offer, not a final one. Your lender knows most people sign without asking, so the first number is rarely their sharpest. You are a known, paying borrower. That is worth something, and you are allowed to ask what else they can do before you look elsewhere.

2. Starting too late

Most lenders will hold a rate for 90 to 120 days. That means the useful window to compare is about four months before your maturity date, not four weeks. Start late and you run out of time to switch, so you take whatever is in front of you. If you don't know your maturity date, it is on your annual statement or in your bank's app.

Want the nudge?

Send me your renewal date and I'll reach out six months ahead. Set a renewal reminder

3. Assuming switching is expensive

At maturity there is no penalty to leave your lender. If you switch a straightforward mortgage to a new lender at renewal, the new lender often covers the usual legal and appraisal costs. It varies by lender and product, so ask, but "it costs too much to move" is usually an assumption, not a quote.

4. Renewing the same mortgage you had five years ago

Your life probably changed since you signed. Renewal is the one moment you can change amortization, payment frequency, prepayment room or term length with no penalty. Expecting a bonus, an inheritance or a sale? Prepayment privileges matter. Money tight? A longer amortization lowers the payment. Renewing "as is" without thinking about it is a choice, and often not the right one.

5. Skipping the stress test question

Since late 2023, borrowers switching an insured mortgage to a new lender at renewal have generally not had to requalify under the stress test, and in late 2024 that was extended to uninsured straight switches. Rules and lender policies change, so confirm what applies to you, but don't assume you are stuck because you wouldn't pass a stress test today. Many people are more portable than they think.

What to do this month

1. Find your maturity date.
2. Four months out, get your renewal letter and at least one outside comparison.
3. Decide what you want to change: term, amortization, prepayment room.
4. Then sign, wherever the best fit is. Sometimes that is your current lender.

Through Dominion Lending Centres I compare renewal offers from 90+ lenders for homeowners across Greater Victoria. There is no cost to you for a comparison in most cases,* and no obligation.

Prequalification vs preapproval: which one you actually need

The words get used interchangeably. They are not the same thing, and in a competing offer situation the difference decides whether a seller takes you seriously.

By Gary Nagra · September 2026

Prequalification: an estimate

A prequalification is a quick calculation. You share your income, debts and down payment; you get a rough idea of what you might borrow. Nobody checks anything. An online calculator does the same job in thirty seconds. It is useful for orientation, like "are we looking at condos in James Bay or townhomes in Langford?", and that is where its usefulness ends.

Preapproval: a verified file

A preapproval means a lender has actually looked. Your income documents, down payment source, credit report and debts have been reviewed, and the lender has committed in writing to a maximum amount at a held rate, usually for 90 to 120 days. If you buy within that window and the property checks out, the financing is very likely to go through.

Prequalification

• Self reported numbers
• No credit check
• No rate hold
• Minutes
• Not binding on anyone

Preapproval

• Documents verified
• One credit check
• Rate held 90 to 120 days
• A few business days
• Written lender commitment

Why it matters when you make an offer

Sellers and their agents read offers for risk. An offer backed by a real preapproval is stronger than one leaning on a calculator printout, and in a multiple offer situation that can be the difference. It also protects you: you learn about a problem on your credit report or a gap in your income proof before you have fallen in love with a house, not after.

What a preapproval does not do

It is not a guarantee. The lender still has to approve the specific property: its value, its condition, whether it is a strata with a healthy contingency reserve fund. And it assumes nothing changes on your side. Financing a car, changing jobs or opening new credit between preapproval and closing can undo it.

Does the credit check hurt?

One mortgage inquiry has a small, temporary effect on your score. When we work together, one credit pull is shared across the lenders I approach, so you are not checked separately by each one. That is one of the practical reasons to run the process through one broker rather than walking into five banks.

So which one do you need?

If you are a year or more from buying, a prequalification and a savings plan is enough. If you are viewing homes, get preapproved. In most cases it costs nothing,* and it turns "I think I can afford this" into "I can."

Ready to start? My preapproval document checklist tells you exactly what to gather.

Down payments in BC: 5%, 10% and 20% explained

The minimum is smaller than most people think. The tradeoffs are real. Here is how the tiers work and what each one means for your payment.

By Gary Nagra · September 2026

The minimum, by price

Federal rules set the floor for an owner occupied home:

5%

of the first $500,000 of the price

10%

of the portion between $500,000 and $1,499,999

20%

of the whole price at $1.5 million and above

So on a $750,000 home the minimum is $25,000 (5% of $500,000) plus $25,000 (10% of the next $250,000): $50,000, or about 6.7%. The $1.5 million ceiling for insured mortgages took effect in December 2024; before that it was $1 million.

Under 20%: mortgage default insurance

Put down less than 20% and the mortgage must be insured through CMHC, Sagen or Canada Guaranty. The premium is a percentage of the loan and slides with your down payment: smaller down payment, higher premium. It is normally added to the mortgage rather than paid in cash, and unlike some provinces, BC charges no provincial sales tax on it. Insurance is not a penalty: insured mortgages often carry lower rates than uninsured ones because the lender's risk is covered.

20% and up: no insurance, more flexibility

At 20% you skip the premium, can amortize over 30 years with most lenders, and can buy properties insurers won't cover, like some rentals, rural homes and higher priced properties. The tradeoff is time. In Greater Victoria, saving 20% can take years longer than saving the minimum, and prices and rents do not wait.

Where the money can come from

• Savings. Lenders trace 90 days of statements.
• FHSA. Tax deductible in, tax free out for a first home, up to the annual and lifetime limits.
• RRSP Home Buyers' Plan. Withdraw up to the current limit per person, repaid over 15 years.
• A gift from an immediate family member, with a signed letter that no repayment is expected.
• Equity in a home you already own, if you are moving up.

Borrowed down payments, like a line of credit or personal loan, are possible with some lenders but count as debt and change what you qualify for. Talk to me before going that route.

Don't forget closing costs

BC Property Transfer Tax, legal or notary fees, title insurance, adjustments and moving costs come on top of the down payment. First time buyers in BC may be fully or partly exempt from Property Transfer Tax (currently no tax on the first $500,000 of the price for homes up to $835,000, phasing out by $860,000), but you still need cash for the rest. The closing costs calculator adds it all up. Lenders typically want to see roughly 1.5% of the price available for closing, over and above the down payment.

So how much should you put down?

The honest answer: the amount that gets you into a suitable home without emptying your emergency fund. A bigger down payment is not automatically better if it leaves you with nothing when the roof needs work after a wet winter. Run both scenarios, minimum and 20%, and look at the monthly payment, the total interest and the cash you would have left. That is a twenty minute conversation, and it is the one I have most often with first time buyers.

Down payment tiers, insurance rules and Property Transfer Tax exemptions are set by the federal and BC governments and change from time to time; figures reflect the rules as of publication. All mortgages are subject to lender qualification and approved credit (O.A.C.).