If you have a mortgage coming up for renewal in Canada, it’s best to know the facts before diving in, to help you make the most of this. That’s where I’m happy to lend a hand! If you are unsure how the process works, or if you have specific concerns, I can walk you through the fundamentals and help you make an informed decision.
Here is a rundown of what you should know about mortgage renewals in Canada.
A mortgage renewal is a process that typically takes place at the end of your mortgage term where you can explore a variety of options from various lenders. This is primarily done to obtain a more favourable interest rate compared to what your current lender is offering you, helping you save as much interest as possible. The result is the ability to potentially save thousands of dollars, which can then be used instead for important renovations, new furnishings, or that long-planned family vacation.
The renewal process usually takes place when your mortgage matures, which is at the end of your term. If at a five-year fixed rate for example, this would be at the end of the five-year mark. However, mortgages can come with terms of up to 10 years, so the time at which you are up for renewal will depend on when that term ends. Some lenders also offer earlier renewal options. This can mean renewing several months earlier. Renewal rates could be lower or higher than what you have currently, but you’ll need to choose from what is available at the time.
It all starts with a renewal statement, which is sent to you by the mortgage lender. If your lender is a federally regulated financial institution, it is provided to the borrower within 21 days of the term’s end date. In this document, you’ll be informed of figures including the remaining mortgage balance, and notably, the interest rates available for you at the time of renewal.
At this stage, it’s important to negotiate with the lender as they usually do not provide the lowest possible interest rates. There may be alternative options in terms of term length or otherwise that can reduce the interest rate as well. If you don’t get in touch with your lender, they may automatically renew your mortgage into terms that are not favourable, so taking action is important in order to avoid this. Some lenders and major banks allow for early mortgage renewals, enabling you to lock in an interest rate several months before the new term starts.
Mortgage Renewal Tips
If you're planning on renewing your mortgage, there are a few things you should keep in mind. Here are some tips to help you make the process as smooth and stress-free as possible.
An experienced broker comes with ample expertise and market insights, not to mention established relationships with different types of lenders. They will handle the entire process with care and precision, your information will be processed promptly. Our commitment is towards helping you receive the best possible rate and most favourable conditions on your renewal. The right broker should also have the knowledge and communications skills necessary to help you navigate the entire process.
When all is said and done, it’s a win-win situation to have the right broker on your side. Come mortgage renewal time, you can count on me to secure the best possible terms and rates while providing you with plenty of guidance. Renewing your mortgage should be an easy, stress-free, and cost-saving experience, and I’m happy to make it happen! Get in touch today, and let’s chat about your needs as a homeowner.
Andrew Thake is a seasoned mortgage broker with over 15 years of industry experience. He’s assisted more than 2,200 clients in finding their ideal mortgage solutions. Recognized for his excellence, Andrew has received high honours and awards, including the National Rookie of the Year from TD Canada Trust and recognition as a Top 10 Ottawa Mortgage Broker in 2023. He has also been inducted into the Hall of Fame at Dominion Lending Centres and has consistently received their Platinum Award during his tenure as a mortgage broker.
Andrew’s dedication lies in serving his clients and prioritizing their needs with an empathetic approach. Throughout the application process, he provides tailored, informed, and efficient services to ensure the best mortgage solutions for his client’s unique circumstances. The best part of Andrew’s job is when he gets to see the joy on his clients’ faces following their mortgage approval.