Mortgage Renewals and How They Work

November 29, 2012

Mortgage Renewals CanadaWhen your renewal date is near (the term of your mortgage is ending), it’s important to know your options in order to secure a mortgage that best suits your needs. Your mortgage lender will send out a mortgage renewal notice and many customers simply fill out the form, sign it and return it back to their lender without exploring other options. At renewal time, the key is to shop around for lower mortgage rates.

Renewing your mortgage

Typically, you’ll receive renewal documents four months before the renewal date. This does not mean that you must immediately sign and return these forms. Instead, it’s a good time to reassess your personal financial situation to make sure you find the best possible mortgage option suited to you. You should look at your options at least four months before your mortgage renewal date.

Mortgage renewal tips

Here are some tips to help you navigate through your mortgage renewal process with ease.

  • Research and compare mortgage products and rates that are currently available in the market.
  • Ask plenty of questions and consider your options carefully.
  • Reassess your financial situation.
  • Determine your mortgage goals – when do you plan to be mortgage-free? How much can you afford? This will help you determine your amortization period and payment schedule (monthly vs. bi-weekly payments).
  • Understand the level of risk you are willing to take so that you can identify whether you should select a variable or a fixed rate mortgage.
  • Shop around for Canadian mortgage rates to find a better mortgage rate, using sites like

To help assess your financial situation, ask yourself these questions:

  • Are you satisfied with the services offered by your current lender?
  • Does your household budget allow you to increase your mortgage payments so you can pay off your mortgage sooner?
  • Do you want to change your payment frequency?
  • Can you make prepayments?
  • Do you want to consolidate other debts that have higher interest rates?
  • Do you need money for a major renovation?

Renewing your mortgage is a fresh start. You will be closing out your current mortgage and taking out a new mortgage at a different rate with a lower principal. It’s the best time to reassess your mortgage needs.