Renewing Your Mortgage Just Before Selling: The Mistake That Costs Thousands
Planiprêt
Jun 01, 2026
Marc and Julie signed their mortgage renewal in January. Five months later, they decided to sell their home and upgrade to something bigger. What they hadn't factored in was how much that decision was going to cost them.
Everything Seemed Fine
When the renewal letter arrived in the mail, Marc and Julie did what most homeowners do: they looked at the rate, decided it seemed reasonable, and signed. No questions asked, no call to a broker. The mortgage was renewed for five years. Done.
A few months later, their family grew. The home that had seemed like a perfect fit was suddenly too small. The decision to sell came naturally.
That's when things got complicated.
The Bill Nobody Saw Coming
To sell their property and pay off the existing mortgage before maturity, Marc and Julie had to pay a penalty to their lender. Since they had chosen a fixed rate with a major bank, the penalty was calculated using the interest rate differential, not simply three months of interest.
The amount? Nearly $9,000.
Nine thousand dollars lost, not because they had chosen a bad rate, but because nobody had asked them the right question before they signed: are you thinking about selling in the next few years?
The Problem Is the Question Nobody Asks
At renewal time, the conversation almost always revolves around the rate. Fixed or variable? How many years? What will the monthly payment be?
What gets overlooked is what's actually coming up in the homeowner's life.
A mortgage renewal isn't just a financial decision on paper. It's a decision that needs to account for your real horizon: how long do you actually intend to stay in this property? Is there a move, a sale, or a life change on the horizon?
If Marc and Julie had had that conversation with a Planiprêt broker before signing, their options would have looked very different.
What a Broker Would Have Analyzed
Faced with their situation, a broker could have explored several paths:
- A shorter term, such as one or two years, to reduce exposure to penalties if a sale came up sooner than expected
- A product with a portability clause, allowing the mortgage to be transferred to the new property without triggering a penalty
- A variable rate product rather than fixed, where the penalty is generally limited to three months of interest regardless of when the sale occurs
- A real-cost analysis of different scenarios, including potential penalties under each option
There's no universal answer. But there is a process. And that process starts with understanding your situation before looking at rates.
Portability: A Feature That's Often Misunderstood
Some mortgage contracts include a portability clause, which allows you to transfer the existing loan to a new property without breaking the current term. It's a valuable protection for anyone who might sell and buy again.
But portability has its limits. It's only possible when the sale and purchase happen within a timeframe compatible with the lender's requirements, typically 30 to 90 days. And it doesn't always eliminate fees entirely, especially if the mortgage amount changes.
That's the kind of detail a broker verifies before recommending a product, not after.
So What Did Marc and Julie Do?
They sold the house, paid the penalty, and bought the property they needed. Under the circumstances, it was still the right decision.
But Marc was left with a question he couldn't shake: "If I had called a broker before renewing, could we have avoided that $9,000?" The honest answer is yes, probably.
Today, when his mortgage is coming up for renewal, he calls Planiprêt four to six months in advance. Not because he learned a hard lesson. Because he understands that the right time to think about your mortgage isn't the day the letter shows up in the mail.
Your renewal is coming up and you have plans in the next few years? Talk to us before signing anything. A few minutes of conversation today could save you from a very costly surprise tomorrow.
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