Here is some information for when the time comes to renew your mortgage. When you choose a fixed or variable rate mortgage, you choose a term where you are guaranteed a certain discounted rate at the bank from 6 months to 10 years. Once that term is near completion, normally your bank will send you a letter stating your renewal date and the rates you would be eligible for if you were to renew with them.
Many of the times you come near renewal you will receive a notice making you an offer and saying you can renew early without penalty. This may not be in your best interest as it is common for the bank / lender you are currently with to offer you a slightly higher rate then what is available as they already have your business.
This is where a mortgage broker comes in so you may speak to them and see if you may achieve a better rate at another lender. There is generally minimal or no cost to switch your mortgage to another bank. The difference between staying with your current bank is all you have to do is verbally tell them to renew whereas if you want to switch banks your income vs. debt must qualify to switch lenders.
It is at the least a good idea to check with a broker to see if there are better rates and if they are that much better to check into switching to a new lender.No new funds may be advanced as that would then be considered a refinance. Different lenders want your business so it is in your best interest to see what is out there come time for your mortgage to renew.