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Your mortgage renewal

As your mortgage nears its end of term, your lender will typically send you a renewal offer. Read on to learn how this affects your mortgage payment!

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mortgage renewal


What is a mortgage renewal?

First, a mortgage renewal should not be confused with a refinancing. Refinancing allows you to borrow more money for a personal project or to consolidate debt, by leveraging the equity of your property. A mortgage renewal, on the other hand, does not grant you additional financing. Instead, you continue to pay off your existing mortgage under new conditions.

A renewal is usually arranged four to six months before your current contract expires. The lender will let you choose whether to pay off your mortgage in full or spread the payments and remaining balance over a new term. At which point you can negotiate an interest rate and new financing terms according to current market offers.

Renewals are interesting because Canadian mortgage law allows you to renew with your current lender or with another financial institution! A mortgage contract is not like a marriage contract: at your end of term, you are as free as a bird! Therefore, we strongly recommend each of our clients explore promotional offers with competitors before renewing with their current lender. And if the grass is greener in the neighbor’s yard, don’t hesitate to jump the fence (he he!)

With that, there are various costs associated with renewals, depending on when it is completed. Since this procedure must be carried out meticulously, having a mortgage broker represent you is ideal. The professionals of Team Distinction will happily present you with available options. Believe it or not, you may be in for a pleasant surprise!

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When to shop

When to shop for a mortgage renewal?

For a stress-free experience, it is ideal to contact us four to six months prior to the end of your term.


This allows us enough time to evaluate market trends and take advantage of fluctuating offers and interest rates.

Further, with enough time, we can evaluate your personal finances, take action accordingly, and track your progress. This includes your income, current debt load and short to long-term objectives.

Equipped with this information, they will hunt for the best financing conditions on your behalf!

While your broker is on a mission for your mortgage, you are granted peace of mind. You may resume your daily activities such as child care, dog walking, shopping for your mother-in-law and watching TikTok videos!


Your broker will handle everything, all without costing you a penny!

Another significant advantage of doing business with Team Distinction is our quick access to numerous financial institutions – saving you from tedious searching and comparing. Further, by knowing you and your file well, we will be able to assist you during your future mortgage renewals with ease. Building a harmonious and long-term relationship with you is our ultimate goal.


The possibilities

A renewal is an opportunity to modify the clauses of your mortgage, one you should take full advantage of!

Ideally, our team will aim to remove certain contractual provisions that are unfavourable to you by providing lenders with the right arguments and solid guarantees.

Here are some of the possibilities :

Compared to refinancing, a home equity line of credit – for up to 65% of your home’s market value, is easier to secure and less restrictive. The interest rate on a home equity line of credit is lower than that of revolving credit or an unsecured loan, for example. You repay only what you’ve used and can do so at any time without penalty.

The flexibility of a line of credit does have one drawback: since you’re only obliged to pay the accrued interest monthly, you must be extremely disciplined to avoid spending all the available credit. Also, should you intend to transfer your mortgage at the next renewal, you are must pay the entirety of your line of credit and all associated fees.  With that, you should carefully analyze your finances before adding a line of credit.

Are you hesitant or concerned you’ll make a mistake?  Rest assured this is normal, especially for such a significant and important operation.  A member of Team Distinction awaits your call and will be happy to guide you in the right direction.

Keeping in mind that banks charge penalties a mortgage is paid off prior to the end of the loan’s contract. However, your Team Distinction broker can negotiate the terms and fees associated with early repayment; taking into account the balance owing, the duration of the loan and the frequency of your additional payments or lump-sum payment.

Your mortgage renewal is also an opportunity to negotiate a variable rate for your upcoming term. This change in rate is possible even in the case of a simple mortgage transfer. This operation is of great interest to most when market rates demonstrate a downward trend.

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Take charge

A mortgage renewal is the perfect time to take charge of your finances. Asking yourself the right questions is key. Such as :

  • Are your current monthly payments too high for comfort?
  • Can you handle additional payments?
  • When do you expect to have paid off your loan in full?
  • Can your job prospects (or a change in your personal life) affect your ability to repay?
  • Do you plan to move in the next few years?

Reflecting on your plans with a broker is key to improving your profile as a borrower and will help you navigate your mortgage renewal accordingly.

To renew or transfer?

Renewing your mortgage with the same lender is worthwhile if you have a good relationship with your representative and they’re willing to grant you improved conditions for your upcoming term, in exchange for your loyal business.

However, your freedom to transfer your mortgage to another lender who can offer better savings is precious. Transferring your mortgage to another lender can entail costs that should not be overlooked, such as paying for an evaluation of your property.

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Why transfer?

Transferring is advantageous if an alternative financial institution is offering conditions better suited to your financial needs. Beyond your renewal, some lenders will even grant you a line of credit or add additional financing to your loan if the equity in your property exists.

This is particularly interesting if you have expensive projects, such as major renovations to finance or an interest in other real estate investments and acquisitions.

Want to discuss mortgage renewals further or jump right in? Make an appointment with a member of Team Distinction now by filling out our contact form!