Mortgage Renewal

Mortgage renewal is the point at which your mortgage term ends and you negotiate a new term, either with your current lender or by moving the mortgage to a different one. The loan and its amortization period carry on; what resets is the mortgage term, the interest rate, and the conditions attached to it.

How a renewal works in Canada

A mortgage term is separate from the amortization period over which the loan is paid off. As the term approaches its end date, the lender typically sends a renewal statement or renewal offer showing the remaining balance, the new rate it is offering, and the new term length. That offered rate is often closer to the lender's posted rate than to the discounted rate a new borrower might be quoted, so it is worth comparing options and negotiating before the maturity date passes.

Why it matters to a borrower

Because the rate is reset for a fresh term, renewal is one of the few moments when a borrower can change the cost of the loan without breaking it. A mortgage renewed at a different rate produces a different payment, and over a multi-year term the difference compounds. Renewal is also when many borrowers shorten their amortization, change payment frequency, or start using prepayment privileges — choices that affect total interest paid.

Comparing offers and switching lenders

Renewal is a decision point, not an automatic formality. Borrowers can stay, negotiate a better rate, or switch lenders entirely. A switch usually involves a fresh credit check and, when the new lender is federally regulated, qualifying under the federal mortgage stress test — the same OSFI Guideline B-20 requirement applied to new mortgages. If your income or debts have changed since you first borrowed, that test can reduce how much can be carried over. Renewing with your existing lender typically does not require requalifying.

Two practical cautions apply. If the mortgage is registered as a collateral charge, moving it may be more involved and costlier. And if the term is broken before maturity rather than renewed, a prepayment penalty may apply. Running the numbers through a mortgage renewal calculator before you sign shows the payment impact of each offer, and the step-by-step renewal guide walks through the timeline.

Frequently asked questions

Does my mortgage renew automatically?

In practice, yes. If you do nothing, the lender typically rolls the balance into a new term at its offered rate and conditions, and payments continue. That is convenient but rarely the cheapest outcome, because you have not compared other offers. Contact the lender or a broker before the maturity date if you want to negotiate or switch.

Do I have to requalify for a mortgage at renewal?

Renewing with your current lender generally does not require full requalification. Applying to switch to a different federally regulated lender usually means a new credit check and qualifying under the federal mortgage stress test, which uses a higher qualifying rate than your contract rate. Confirm the current rules with the lender or on the OSFI and FCAC websites.

Can I renew early or change my renewal date?

Renewing before the term matures normally means breaking the existing term, which can trigger a prepayment penalty — often three months' interest or an interest rate differential, whichever the lender calculates as greater. Some lenders offer an early renewal window ahead of maturity that lets you lock a rate without penalty, so confirm what your lender offers.