What Is a Mortgage Letter?
Your bank puts its renewal offer in writing. Most people answer it with a phone call and a vague sense that rates are lower somewhere else. A Mortgage Letter lets you answer in writing too.
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Quick Answer
On the record
Recorded by Camilo Rodriguez · 3 min
Camilo, in his own voice: when staying with your bank is the right call, why a bank will offer you a higher renewal rate if it can, and what a Mortgage Letter is — and isn’t.
Why does your bank's renewal offer assume you won't shop around?
Because a lot of people don't. When the Financial Consumer Agency of Canada looked at how mortgage holders renewed, only 48% had compared lenders themselves and another 36% had someone else, such as a broker, shop around for them. One in five did not compare lenders at all, and 13% did not know the rate or terms could be negotiated (FCAC research, March 2026).
20%
didn’t compare lenders at renewal
FCAC research, 2026
13%
didn’t know they could negotiate
FCAC research, 2026
~60%
of all mortgages renew in 2025 or 2026
Bank of Canada, July 2025
It matters more this cycle than most. The Bank of Canada expects about 60% of all outstanding mortgages to renew in 2025 or 2026, and about 60% of those borrowers to see a payment increase; for 5-year fixed mortgages renewing in 2026, the average increase is about 20% (Staff Analytical Note 2025-21).
After more than 23 years of renewals, Camilo Rodriguez is the first to say that moving isn't always the answer. Sometimes staying with your bank is the right call. Sometimes another lender has better terms, or a broker can show you a strategy that beats the product your bank is offering. This article is about the first group: people who want a straight renewal at a fair rate, and who are happy to stay if their bank offers one.
“Banks are in the business of making money with mortgages. Even if you have always paid on time and been a good client for many years, if they can get away with a higher renewal rate, they will offer it. I don't think that's a bad thing — it's just business. To avoid it, you need to show them proof that you can get a fair offer elsewhere.”
If you have done the comparing, the next problem is proving it. A rate you saw on a website is easy to wave away: the bank doesn't know where it came from, whether it applies to you, or whether it still exists tomorrow. And the rate is only part of the price — see mortgage rates vs. the cost of credit and the true cost of borrowing.
What is a Mortgage Letter — and what isn't it?
“Letter” covers several different documents in a Canadian mortgage, and they do very different jobs. Search for “mortgage letter” and you will find gift letters and commitment letters. The one that matters at renewal is the one that shows your bank the market.
| Document | Who issues it | What it says | Binding on a lender? | When you use it |
|---|---|---|---|---|
| Mortgage Letter | A licensed mortgage broker | Three of the day's rates for your province, dated and signed | No | Before renewal, to show your bank the market |
| Pre-approval | A lender | How much you may borrow, often with a rate held for a period | No — full approval still required | Before shopping for a home |
| Rate hold | A lender | A rate reserved for a set number of days | On the rate, if you are approved | While you finish shopping or switching |
| Commitment letter | A lender | The approved amount, rate, term and conditions | Yes, once you sign and conditions are met | After approval, before the mortgage funds |
| Renewal statement | Your current lender | The terms offered for your next term | It is the lender's offer to you | At least 21 days before renewal, at a bank |
| Gift letter | A family member | That down payment money is a gift, not a loan | Not a rate document | When buying with gifted funds |
What a Mortgage Letter will never be
“It's important to understand that this is not a guarantee, and it is not an approval. You may or may not qualify for the rates in the letter. But at least you know those are the mortgage rates available in the marketplace at that moment.”
Does my bank have to match a lower mortgage rate?
No. No rule requires a lender to match another lender's rate; each bank sets its own retention policy. What a bank does have to do is put its renewal offer in front of you in time. Under the federal Financial Consumer Protection Framework Regulations (s. 45), a bank must give you the renewal statement at least 21 days before your renewal date, and if it arrives later, the renewal cannot take effect until 21 days after you receive it.
Between those two facts sits the whole negotiation: the bank weighing the cost of losing you. That is where the form of your evidence starts to matter.
No lender is obliged to match
Asking by phone
- You describe a rate you saw online; the bank can’t tell where it came from.
- Easy to answer with “that rate isn’t available to you.”
- Nothing on file: the next person you reach starts from zero.
- Fast, and sometimes enough when your offer is already close.
Works when the gap is small.
Asking with a Mortgage Letter
- Dated rates for your province, from a named, licensed broker.
- A document you can email, so the request and the proof travel together.
- Three terms, so you compare like with like.
- Not an approval: to switch, you still apply with the new lender.
Built for the conversation where the gap is worth arguing about.
What is a mortgage retention offer?
A retention offer is the better rate a lender puts forward to keep a borrower who looks ready to leave. It is not a published product: there is no rate sheet for it, it often comes from a team that handles renewals or retention rather than from your branch, and whether you get one depends on the lender, your mortgage and what you can show them.
Ask where retention decisions are made
How much is a rate match worth on your mortgage?
Brokers and banks talk about rate gaps in basis points, and the arithmetic is simpler than it sounds. Put in your balance, your bank's renewal offer, the rate on your Mortgage Letter and your term.
What are basis points (bps)?
Rate Match Savings Calculator
The gap between your bank's renewal offer and your Mortgage Letter, in basis points — and what closing it saves you per year and over your term. The numbers below are examples; replace them with yours.
Rate gap
60 bps
4.69% vs 4.09%
Savings per year
$2,700
1 bps = $45/year on this balance
Savings over 5 years
$13,500
if your bank matches the letter
A simple estimate: balance × rate gap × years. Because your balance goes down as you make payments, the real interest difference over the term is a little lower. A lender is not obliged to match any rate, and the rates on a real letter depend on the day, your province and your mortgage.
| Balance at renewal | 10 bps (0.10%) | 25 bps (0.25%) | 50 bps (0.50%) |
|---|---|---|---|
| $300,000 | $300 a year | $750 a year | $1,500 a year |
| $500,000 | $500 a year | $1,250 a year | $2,500 a year |
| $800,000 | $800 a year | $2,000 a year | $4,000 a year |
How do you use a Mortgage Letter at renewal?
- Step 1
Start four to six months before your term ends
The Canadian Mortgage Charter expects lenders to contact you about renewal 4 to 6 months in advance. That is when your options are widest. For the timeline in detail, see when to lock in your renewal rate. - Step 2
Request your Mortgage Letter
Tap the WhatsApp button for your province below. The assistant shows you today’s rates first; the letter is made out to you and signed by a licensed broker. - Step 3
Read your renewal statement against it
Same term, same type of rate, line by line. At a bank, the statement has to reach you at least 21 days before renewal. - Step 4
Ask your bank to match — in writing
Send the letter with your request and ask for any improved offer in writing. If the first answer is no, ask for the team that handles retention. - Step 5
If they won’t move, look at switching
A straight switch between federally regulated lenders — same balance plus up to $3,000 for switching costs, same amortization, no equity take-out — no longer has to be stress-tested at the minimum qualifying rate: OSFI removed it for uninsured mortgages on November 21, 2024, and Finance Canada for insured mortgages from December 16, 2024. Whether switching pays for you: switch lenders at renewal or stay?
Get your Mortgage Letter for your province
Tap your province and WhatsApp opens with the request already written. If there is a price, you see it in the chat before you pay anything.
¿Prefieres español? Pide tu Mortgage Letter en español
Questions people ask about Mortgage Letters
Go Deeper on What Matters to You
The letter gets you into the conversation. These guides cover what to do once you are in it.
How to Negotiate Your Renewal Rate
The exact language to use with your bank, and when to escalate.
Read GuideSwitch Lenders at Renewal or Stay?
When a switch is free, when it costs you, and the balance where it stops paying.
Read GuideWhen to Lock In Your Renewal Rate
Rate hold windows and what to do in the 120 days before renewal.
Read GuideThe 2026 Renewal Trap
The complete action plan for renewing in 2026.
Read Guide
Camilo Rodriguez is the Founder of Mortgages Lab, a licensed mortgage broker with over 23 years of experience helping Canadians achieve financial freedom. He has trained 100+ mortgage agents across Canada and is Past President of The Canadian Mortgage Broker Association - BC. He is the author of "From Debt to Zero," a guide to becoming mortgage free.
P.A.Y.O.F.F™, L.A.B™, M.A.P™ are Trademarks of Mortgages Lab®
Financial Disclosure
This page contains informational content only and does not constitute financial advice. Mortgage rates shown are sourced from publicly available lender data and may change without notice. Always verify rates directly with the lender. Mortgages Lab may receive compensation from partner lenders, which does not influence our editorial content or rate rankings. Built on Real Experience — 23+ years of working with real mortgage scenarios and helping Canadians achieve financial freedom.
A Mortgage Letter is a written summary of rates available on the date it is issued. It is not a mortgage pre-approval, a mortgage commitment, an offer of financing or a rate hold, and no lender is obliged to honour or match the rates in it. Any mortgage is subject to a lender's approval (OAC). Rates vary by lender, province, term, borrower profile and market conditions. Requests are handled on WhatsApp by an AI assistant, and a licensed broker can take over at any time. Mortgages Lab may earn compensation from lenders. Camilo Rodriguez is a licensed mortgage broker in British Columbia and Alberta (BCFSA MB142871 | RECA CON10682). Ontario mortgages are brokered through Mortgage Architects, FSRA Brokerage Licence #12728. Statistics are from the government and Bank of Canada sources linked in this article.
Walk Into Your Renewal With the Market in Writing
Get a Mortgage Letter on WhatsApp, or see what lenders are offering today first.