How Much Can You Save by Shopping Your Mortgage Renewal in Alberta?
Short answer
Planning estimates suggest shopping at renewal can save from a few hundred to several thousand dollars over a term, depending on your balance and the gap between your lender’s first offer and competitive market rates. On a typical Alberta balance, 0.25–0.50% can matter — but subtract switching costs if you change lenders.
The plain-English version
Renewal offers are not always the lender’s best rate. Brokers and competing lenders often quote discounted rates below posted renewal letters. Savings equal the payment difference multiplied by months in the term, minus any legal, appraisal, or discharge fees if you switch.
Savings are not guaranteed. If your renewal offer is already near market, switching may only save a small amount after fees. The value of shopping is knowing where you stand — even staying put is easier when you have comparisons.
Alberta-specific considerations
- Alberta legal fees for switching lenders commonly run $1,000–$2,500 including registration — build that into break-even math.
- Collateral-charge mortgages may have higher switching costs, reducing net savings.
- Uninsured straight switches may avoid stress-test hurdles under OSFI’s November 2024 exemption, making shopping practical for more borrowers.
Example scenario
Balance $400,000, 5-year term, 22 years amortization. Renewal offer 5.65% vs competitor 5.15% — about $115/month difference, or roughly $6,900 over five years. Subtract $1,500 in legal and appraisal costs and net savings might be about $5,400 — a planning estimate, not a promise.
Common mistakes to avoid
- Comparing rates without matching term length and product type (fixed vs variable).
- Ignoring fees and only looking at the rate spread.
- Assuming small savings are not worth the effort — on large balances, 0.15% can still matter.
- Waiting until the last minute so only one offer is realistically available.