Why 3-Year Mortgage Holders Should Check Their Rate Now — Before It’s Too Late

The Clock Is Ticking on Your 3-Year Mortgage

If you locked into a 3-year fixed mortgage in 2022 — when rates were at or near historic lows — your term is nearing its end. And whether your rate is 2.49%, 2.99%, or even slightly above that, what comes next could be financially jarring if you're not proactive.

Here’s why: Interest rates have climbed steadily since 2022, and while there’s cautious optimism that rates may stabilize or decline slightly, today’s average renewal rate is still 2%–3% higher than what most homeowners locked in three years ago.

For many Saskatoon homeowners, this could mean:

• A significant jump in monthly payments
• Higher total interest costs over time
• Missed opportunities to access equity or consolidate high-interest debt

Now is the time to take stock — before renewal notices start landing in your inbox or you miss the window to switch without stress. By reviewing your mortgage early, you may be able to secure a better rate, access your equity, or save thousands in interest over the next few years.

Let’s explore why acting now — instead of waiting — can be the smartest financial decision you make in 2025.

Understanding the Current Mortgage Landscape

To understand why reviewing your mortgage early matters, you first need to see how the landscape has shifted since you signed in 2022 — and where it’s headed.

2022 vs 2025: What’s Changed?

In 2022, lenders were offering ultra-low fixed rates to stimulate a recovering economy. Many homeowners, including likely you, chose a 3-year fixed to “ride it out” with flexibility and potential rate declines on the other side.

🔗 Stay up to date on current Bank of Canada rates

Fast forward to mid-2025:

• Your rate hold is about to expire
• You’re facing a significantly higher payment if you simply renew
• You may not have reviewed your mortgage since you signed — and that’s a missed opportunity

Saskatoon Market Update: Why This Affects You Locally

As of May 2025:

• Benchmark Home Price: $485,900 (↑ 8.2% YoY)
• Median Sale Price: $522,500
• Inventory: Down 23% from last year
• Bidding wars and over-asking offers remain common in the $350K–$550K range

Why this matters:

• Your property’s value has likely increased
• You may have tens of thousands in new equity you could use strategically
• Lenders are tightening policies — acting early gives you more choice and leverage

🔗 Explore the latest Saskatoon market trends

Bottom line: Market conditions + rate shifts + equity gains = the perfect time to review. You don’t have to wait until your lender contacts you — you can take control now.

Why Timing Matters for 3-Year Mortgage Holders

You Could Be Paying Thousands More Than You Need To — Here's Why

If you’re 2.5 to 2.75 years into your 3-year mortgage, you’re standing at a critical junction. And here’s what most homeowners don’t realize:

You don’t have to wait until your term ends to take action.
You can explore refinancing, switching lenders, or even breaking early right now — and in some cases, save thousands over your remaining term and next mortgage.

Let’s walk through exactly how that works.

Scenario: Meet Sarah & Alex

• In 2022, they secured a 3-year fixed rate at 2.89% on a $375,000 mortgage.
• Their monthly payments: $1,755
• Today, in May 2025, they have:
  • 11 months left on their term
  • A remaining mortgage balance of $345,000
  • A posted renewal rate from their bank of 5.29%
  • A current broker rate offer (5-year fixed) of 4.69%
  • A prepayment penalty of $2,800

Option 1: Do Nothing — Let the Mortgage Auto-Renew

• Rate: 5.29%
• Monthly payments (assuming a new 5-year term): $2,085
• Total interest over 5 years: ~$79,850

Option 2: Break the Mortgage Now and Refinance at 4.69%

• Penalty: $2,800
• New rate: 4.69%
• Monthly payment: $2,005
• Total interest over 5 years: ~$70,700
• Total savings: ~$9,150, even after the penalty

Plus, they now:

• Accessed $25K in home equity to pay off high-interest credit cards and a car loan
• Switched to a lender with better prepayment terms
• Extended their amortization by 1 year to lower monthly pressure

💡 Use our Mortgage Calculator to model your own renewal or refinance scenario.

So, Why Does This Matter for You?

Because most homeowners will do what the bank hopes they do:

Wait → Auto-renew → Pay more
But with the help of a broker, you can:
Act early → Reassess → Save more

When Should You Check Your Mortgage?

Use this rule of thumb:

Exploring Your Options as a 3-Year Mortgage Holder

You’re nearing the end of your term — or maybe you’ve still got 8–12 months to go. Either way, here are the three main paths you can take, each with different benefits, risks, and timing windows.

Option 1: Early Renewal

Best for:

• Homeowners who want to avoid penalties
• Those within 120–180 days of their renewal date

How it works:
You renew your mortgage with your existing lender before the term expires — sometimes with a new rate and term.

Pros:

• No penalty if done within your lender’s early renewal window
• Locks in your next rate early
• Often the path of least resistance

Cons:

• You’re usually offered only your bank’s rates — not the best on the market
• You may be missing out on thousands in savings over your next term
• No access to equity or structural changes (e.g., changing amortization)

Tip: Always get your lender’s offer in writing and then ask your broker to compare it against other lenders. Loyalty should be earned — not assumed.

Option 2: Refinance Early (Break Your Mortgage)

Best for:

• Homeowners who want to:
  • Access equity
  • Lower total interest costs
  • Consolidate high-interest debt
  • Restructure their mortgage term
• People willing to pay a penalty upfront to save more long-term

How it works:
You break your existing mortgage, pay a prepayment penalty, and replace it with a new one — often with a new lender.

Pros:

• You can access equity (for renos, investments, or debt payoff)
• You may save money even after paying a penalty if current rates are lower
• You can switch to a more flexible lender or better mortgage product

Cons:

• You will have to pay a penalty (typically 3 months’ interest or interest rate differential)
• The new mortgage process includes requalification — good credit and income stability help here

Tip: Have your broker calculate a break-even timeline — if you save $9,000 over 5 years by paying a $2,800 penalty now, you’re ahead by $6,200. Not bad.

🔗 Learn more about refinancing benefits
🔗 Estimate your penalty or break-even point

Option 3: Switch Lenders at Renewal

Best for:

• Homeowners whose term is ending in the next 3–6 months
• People who want to avoid penalties but still get a better deal
• Anyone unhappy with their bank’s renewal offer

How it works:
You move your mortgage to another lender at the end of your term, usually with no penalty.

Pros:

• No penalty at maturity
• Access to lower rates, cashback offers, or better features
• It’s a fresh start without the cost of breaking your mortgage

Cons:

• You still have to requalify — so don’t wait until the last week of your term
• Some lenders have stricter rules or different policies around insurance or amortization

Tip: Start this process 3–4 months before renewal. Don’t wait for your bank’s offer to land in your inbox. Brokers can often hold rates for 90–120 days while you explore.

Key Insight: No matter which option fits you best, the biggest mistake is to do nothing and assume your bank will offer the best rate and structure.

With a broker, you can:

• Compare all options side-by-side
• Model real savings over time
• Build a plan that aligns with your life, not just your loan

Strategic Considerations: What to Look For Before You Switch or Renew

Every mortgage switch or renewal decision should be guided by more than just the interest rate. The fine print, your life plans, and lender policies can have a bigger long-term impact than many people realize.

Here’s how to assess your options like a pro — with the help of your mortgage broker.

1. Understand the Penalty — and Whether It’s Worth It

If you're considering breaking your mortgage before the term ends, you’ll likely face a prepayment penalty.

Example:
Let’s say you owe $345,000 at 2.89% with 11 months left.

• 3 months' interest ≈ $2,500
• IRD ≈ $2,800 (this varies by lender and rate environment)

What to consider:

• How much will you save on interest with the new rate?
• Will you gain flexibility, cash flow, or debt relief by refinancing?
• Can you offset the penalty with cashback or a lower amortization reset?

A mortgage broker will do this math for you and show you the break-even point — so it’s not a guess, it’s a strategy.

2. Know When to Use Equity to Your Advantage

If your home has increased in value over the last few years, you may have unlocked equity — and refinancing can give you access to it.

I can help you evaluate your loan-to-value (LTV) ratio and whether a refinance is possible within lending guidelines (typically up to 80% LTV for refinances).

3. Match Your Mortgage to Your Future Plans

Your renewal or refinance isn’t just a chance to get a new rate — it’s a chance to reset your structure. Questions to consider:

• Are you planning to sell in the next 1–3 years?
• Do you want to pay off your mortgage faster with prepayment privileges?
• Is cash flow a concern that would benefit from a longer amortization?
• Are you thinking about buying a second home or rental?

Why this matters:
You may not need the absolute lowest rate — you might need the most flexible structure to keep doors open for your next chapter.

4. Watch for Hidden Costs in the Fine Print

Not all mortgages are created equal — and not all lenders are transparent. Watch for:

• High IRD penalties hidden in long-term fixed products
• Limited prepayment privileges (e.g., 5% vs. 20%)
• Restrictive portability rules
• Collateral charges that make switching harder later
• Teaser rates that come with nasty surprises in year 2

🔗 CMHC mortgage rules and lender guidelines

A great broker will explain these in plain English so you can make an informed, confident decision — not just a fast one.

Conclusion: Don’t Wait to Be Surprised — Get Ahead of Your Mortgage Renewal

If you're holding a 3-year mortgage from 2022, you're sitting on a powerful opportunity — but only if you act before your term expires.

With rates higher than when you signed, equity gains in your home, and flexible options now available, this is your moment to:

• Save money over the next 5 years
• Restructure your mortgage to fit your life
• Access equity to reduce stress or fund your goals
• Avoid auto-renewals that cost more than they should

Waiting for your renewal letter means reacting on someone else’s timeline — usually with fewer choices and higher rates. But reviewing your mortgage now means you can run the numbers, explore your options, and make a proactive, personalized decision with expert guidance.

Ready to start the conversation?

Let’s run your mortgage numbers and explore whether switching now could save you thousands.

📞 Call or text Mike at (306) 281-4084
📧 Email: mike@huysmortgagegroup.com