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Mortgage Renewal Guide for Canadians
Receiving a mortgage renewal notice is easy.
Signing it is even easier.
But your renewal is one of the few times during your mortgage when you can step back and ask whether the mortgage you currently have still makes sense.
A lot can change during a mortgage term.
Your income may have changed. Your family may have grown. You may have accumulated other debts. The value of your home may have increased. Your financial goals may be different.
Your mortgage should be reviewed in that context.
Don't Treat Renewal Like an Automatic Subscription
Your existing lender will normally provide a renewal offer before your mortgage matures. That doesn't mean it is automatically your best option.
Before renewing, consider:
- the interest rate
- fixed versus variable options
- term length
- payment amount
- remaining amortization
- prepayment privileges
- mortgage penalties
- portability
- refinancing needs
- other debts
- your plans for the property
A seemingly small difference in the mortgage terms can matter over several years.
When Should You Start Reviewing Your Mortgage?
Don't wait until the final few days before maturity.
Starting earlier gives you time to understand your options, gather documentation if necessary and determine whether remaining with your existing lender or moving to another lender makes more sense.
A useful mortgage renewal conversation isn't just:
"What's your best rate?"
It is:
"What has changed since I arranged this mortgage, and what should the next mortgage accomplish?"
Can You Switch Lenders at Renewal?
Yes, subject to qualification and lender requirements. Importantly, OSFI currently does not expect the minimum qualifying rate to be applied to an uninsured straight switch between federally regulated lenders at renewal where there is no increase in either the mortgage amount or amortization period. Individual lenders still apply their own underwriting requirements.
That can make it worthwhile to explore alternatives rather than assuming you must stay with your existing institution.
Should You Refinance at Renewal?
A renewal and refinance aren't the same thing. A refinance changes the mortgage structure and may involve increasing the mortgage amount, changing amortization or accessing home equity. For some homeowners, renewal provides a logical opportunity to look at the entire household balance sheet. For example, someone carrying higher-interest consumer debt may want to understand whether accessing home equity could improve cash flow or reduce borrowing costs. That doesn't mean refinancing is always the right answer. Moving unsecured debt into a mortgage can lower the interest rate but potentially extend repayment over a much longer period. The strategy matters.
Should You Increase Your Mortgage Payments?
Renewal can also be an opportunity to review your amortization.
If your financial position has improved, you may choose to:
- increase regular payments
- make lump-sum payments
- select a shorter amortization where appropriate
- maintain a higher payment even if interest rates decrease
Small changes can potentially make a meaningful difference over the life of a mortgage.
Don't Predict Rates — Build a Plan
Nobody knows with certainty where mortgage rates will be several years from now. Instead of building your entire strategy around predicting the next Bank of Canada decision, consider what level of rate and payment risk you can comfortably handle. The right mortgage is not necessarily the mortgage with today's lowest advertised rate. It's the mortgage whose overall structure fits what you are trying to accomplish.
Make Your Renewal a Financial Checkpoint
Before signing your next renewal offer, have a conversation about:
your mortgage, your other debts, your future plans and your overall financial position.
Your mortgage renewal is more than paperwork.
It's an opportunity to make sure one of your largest financial commitments still works for you.
Talk to Haystax Mortgage before your next renewal. Find a Haystax Mortgage location here.
We work for you, not the banks, providing access to a wider range of mortgage options.
Banks offer only their mortgage products and rates. Unlike them, Mortgage Brokers have access to a variety of lenders, including banks, credit unions, monoline lenders, private financing, and more.
You're at HOME with Haystax!
Frequently Asked Questions
What happens when my mortgage comes up for renewal?
When your mortgage reaches the end of its term, the outstanding balance must either be renewed, paid out or transferred to another lender.
Your existing lender will generally offer new mortgage terms, including a new interest rate and term. You do not automatically have to accept that offer.
Renewal is an opportunity to review your interest rate, payment, amortization, mortgage features, debts and financial goals before deciding how the mortgage should be structured for the next term.
Do I have to renew with my current lender?
No. You are generally free to explore other lenders when your mortgage reaches maturity, subject to qualification and the terms of your existing mortgage.
Switching lenders can allow you to compare rates, mortgage features, prepayment privileges and other terms rather than automatically accepting your existing lender's renewal offer.
There may still be legal, appraisal, discharge or administrative requirements depending on the mortgage and lender, so the complete cost of switching should be considered.
When should I start shopping for a mortgage renewal?
A good rule is to start reviewing your mortgage several months before the maturity date rather than waiting until your renewal notice arrives.
Starting early gives you time to compare lenders, review your finances, gather documents and decide whether you want to renew, switch lenders or refinance.
The objective isn't necessarily to lock something in months early. It is to understand your options before you are forced to make a decision under a tight deadline.
Can I switch mortgage lenders at renewal?
Yes. Many Canadian homeowners can switch lenders when their mortgage renews.
OSFI currently does not expect federally regulated lenders to apply the prescribed minimum qualifying rate to an uninsured straight switch from one federally regulated institution to another when neither the mortgage balance nor remaining amortization is increased. Lenders still apply their own underwriting standards.
This makes it worthwhile to compare alternatives rather than assuming you must stay with your current lender.
Should I refinance when my mortgage renews?
Mortgage renewal can be a good time to consider refinancing because your existing mortgage term is ending and certain prepayment penalties associated with breaking a closed mortgage early may no longer apply.
Refinancing may make sense if you want to consolidate debt, access home equity, change your amortization or restructure your finances.
However, refinancing involves new qualification and may involve legal, appraisal or other costs. The decision should be based on whether the new structure improves your overall financial position.
Can I negotiate my mortgage renewal rate?
Yes. A lender's initial renewal offer does not necessarily have to be the final offer you accept.
You can ask your existing lender whether better rates or terms are available and compare its offer with alternatives from other lenders.
Remember that rate is only one part of a mortgage. Penalties, prepayment privileges, portability, payment flexibility and other terms can also have significant financial value.
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