26 November 2025

Negotiating your mortgage is not just about the rate. Between terms, prepayment privileges and penalties, every detail can make a big difference in the total cost of your loan. Here is how to secure the best possible terms for your next mortgage in Quebec.

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Before negotiating: prepare your file properly

The success of a mortgage negotiation is largely decided well before the meeting with the lender. The stronger your file, the more leverage you will have to obtain better terms.

Start by checking your credit score. A good credit report (generally above 700) shows that you are reliable and can help you secure a better rate. If your score is lower, take the time to pay down your most expensive debts or reduce your credit utilization before applying.

Next, assess your borrowing capacity. In Canada, lenders apply a stress test to make sure you would still be able to pay your loan even if rates went up. This test is based in particular on two ratios:

• the gross debt service (GDS) ratio, which compares your housing expenses to your income;
• the total debt service (TDS) ratio, which takes all of your debts into account.

Prepare all required documents: proof of employment and income, bank statements, available down payment and a list of your debts. The clearer and more complete your file is, the smoother the process will be.

Finally, compare rates and terms with at least two or three lenders (banks, credit unions, brokers). This will give you a realistic idea of your room for negotiation even before you start.

What you should negotiate (and not just the rate)

The interest rate gets all the attention, but it represents only part of the real cost of your mortgage. Here are the key elements to review before signing.

The interest rate (fixed or variable)

A fixed rate offers stability, while a variable rate can be advantageous if markets trend downward. The key is to choose based on your risk tolerance and your financial plans.

The term length

A 5-year term is common, but you can also find 1, 3 or 10-year options. Shorter terms can be useful if you expect to sell or refinance soon.

Prepayment penalties

These can amount to several thousands of dollars. Before signing, ask exactly how they are calculated and in which situations they apply.

Prepayment privileges

Some loans allow you to make additional payments or increase your regular payments without penalty. These options can reduce the total cost of your mortgage over the long term.

Portability of the loan

If you move, a portable mortgage lets you transfer your rate and terms to a new property without paying a penalty.

Additional fees

File, appraisal or transfer fees: even if they seem minor, they can increase the bill. It is often possible to reduce some of them during negotiations.

4 effective strategies to negotiate your mortgage in 2025

A successful negotiation is based on preparation, timing and your ability to compare offers. Here are four concrete strategies to get better terms on your mortgage this year.

1. Compare several offers before signing

Do not limit yourself to your bank’s first proposal. Differences between institutions may seem small, but a 0.25% gap on a loan of several hundreds of thousands of dollars represents thousands in savings. Consult banks, credit unions, cooperatives and brokers to build a solid comparison baseline.

2. Ask your current institution for a counter-offer

At renewal time, your lender will often send you a default offer. Never sign without negotiating. Contact them to request a counter-offer, mentioning more competitive rates you have received elsewhere. This is often enough to reduce the rate or improve the terms.

3. Use competition to your advantage

Lenders know they are not alone in the market. Let them know, politely but clearly, that you have several options. This creates healthy competitive pressure and can work in your favour, even if you ultimately decide to stay with them.

4. Get the timing right and prepare your pitch

The best time to negotiate is between three and six months before the end of your term. This gives you enough time to compare offers without rushing.

Then prepare a simple, fact-based pitch, for example:

“I received an offer at 4.79% for a five-year term. Can you match it or improve the prepayment privileges?”

The key is to remain polite, prepared and precise: lenders appreciate clients who know what they want.

Should you work with a mortgage broker?

If negotiating with financial institutions feels complicated, a mortgage broker can greatly simplify the process.

This professional compares offers from several lenders on your behalf to find the best terms for your situation. They understand the differences between mortgage products and know which institutions are most flexible for certain profiles self-employed workers, first-time buyers, refinancing, etc.

In most cases, the mortgage broker is paid by the lender, not by you. You therefore benefit from their expertise at no additional cost. You remain free to choose the product and lender, while enjoying personalized support.

Your real estate broker can also play a key role. By working daily with financing professionals, they can recommend a trusted mortgage partner to help complete your purchase or renewal project.

Teaming up with a mortgage broker and a real estate broker means combining two complementary areas of expertise to negotiate better and secure your transaction.

What if you are renewing or refinancing your mortgage?

Renewing your mortgage

Mortgage renewal is the perfect opportunity to review your terms and negotiate a better interest rate. When your lender sends you a renewal offer, do not sign right away: first compare the mortgage rates available elsewhere.

Even a small difference can represent several thousands of dollars in savings over the life of your mortgage loan. If you stay with the same institution, it is sometimes possible to renegotiate without repeating the stress test, which makes the process easier.

Refinancing your mortgage loan

Refinancing your mortgage means replacing your current loan with a new one, often to obtain a better rate or to access the equity you have built in your property.

This option can be beneficial for financing renovations, consolidating debts or investing in a new project.

Before going ahead, make sure to assess the fees and penalties to confirm that refinancing is truly beneficial in the long term.

Frequently asked questions about mortgage negotiation

Can you negotiate the loan amount?

The amount of a mortgage loan mainly depends on your down payment, your income and the result of the stress test. You cannot “negotiate” it directly, but a strong file can help you obtain better approval conditions.

When is it most advantageous to renegotiate?

It becomes interesting to renegotiate your mortgage when the difference between your current rate and market mortgage rates is around 1% or more. However, you must factor in penalties to ensure the operation remains profitable.

What if my credit score is average?

If your score is below 700, focus on reducing your debts and paying your bills on time. This will help you obtain better terms for your future mortgage loan.

What down payment is required to avoid CMHC insurance?

To avoid Canada Mortgage and Housing Corporation (CMHC) mortgage loan insurance, you must provide a minimum down payment of 20% of the purchase price. Below this threshold, insurance is mandatory to protect the lender.

Is a fixed or variable rate better in 2025?

In 2025, a fixed rate offers more stability in a context of still fluctuating rates, while a variable rate can be advantageous if markets continue to decline. The best choice depends mainly on your risk tolerance and your medium-term financial plan.

In summary: be prepared, compare and negotiate

Negotiating your mortgage loan is not complicated when you know what to look for. By preparing your file, comparing mortgage rates and asking your lender the right questions, you can save thousands of dollars over the life of your loan.

The important thing is to arrive well informed, not accept the first offer and stay in control of your financing terms.

Good preparation and thorough comparison are often worth more than a single percentage point: that is the key to a truly advantageous mortgage.