How mortgage renewal works in Canada

Term vs. amortization

Your mortgage has two clocks. The amortization is the total time to pay it off, often 25 years. The term is the length of your current contract and rate, often 5 years. When the term ends, you renew: you sign a new term, at a new rate, for the balance you still owe.

What happens before your term ends

Your lender will send you a renewal offer. Federally regulated lenders, like the big banks, must send it at least 21 days before your term ends. Many people sign it as is, because it's easy.

But the first offer isn't always the best one your lender can do, and it's only one lender's offer. Renewal is the one moment you can usually walk away without a penalty.

Your three options at renewal

1. Sign your lender's offer. The simplest option, but you may leave money on the table.
2. Negotiate with your lender. A competing offer gives you something concrete to negotiate with.
3. Switch to a new lender. At renewal, moving your mortgage is usually penalty-free. The new lender may cover some switching costs, like legal or appraisal fees, but ask first.

When to start

Start comparing 4 to 6 months before your renewal date. Many lenders let you hold a rate for a few months, so you can lock in an offer early and still take a better one if rates drop.

If you're switching lenders, you may need to provide documents again, like proof of income and a recent mortgage statement. Starting early leaves time for that.

How a broker helps

A mortgage broker compares offers from many lenders at once, explains the trade-offs, and handles the paperwork if you switch. In most cases, the lender pays the broker, so it's free for you.

Ready to compare? See your renewal options.