Mortgage Renewal

Learn how mortgage renewal works in Canada, when to start the process, and how to negotiate the best terms to save on interest and payments.

Mortgage Renewal

May 22, 2025


What is Mortgage Renewal?

Mortgage renewal is the process of extending or renegotiating the terms of an existing mortgage once the original term has expired, typically every one to five years.

Why Mortgage Renewal Matters in Real Estate

In Canada, most mortgages have amortization periods of 25 to 30 years but are broken into shorter terms (e.g., five years). When the term ends, the borrower must renew the mortgage for a new term at current rates and conditions.

Renewal options include:
  • Accepting the lender’s renewal offer
  • Negotiating a better rate or terms
  • Switching to a new lender
Failing to review renewal terms can result in higher interest rates or less favourable conditions. Borrowers should start reviewing options three to six months before their term ends.

Lenders are required to send renewal notices at least 21 days before the term expires, but proactive research often yields better results.
Understanding mortgage renewal empowers homeowners to make informed choices, potentially saving thousands over the mortgage’s lifetime.

Example of a Mortgage Renewal 

A homeowner’s five-year term expires. They negotiate a lower interest rate with their lender and renew for another five years, reducing their monthly payments.

Key Takeaways

  • Occurs at end of a mortgage term.
  • Opportunity to renegotiate rates and terms.
  • Can switch lenders or stay with current one.
  • Planning ahead often secures better deals.
  • Affects long-term borrowing costs.

Related Terms

  • Mortgage Term
  • Fixed Rate Mortgage
  • Variable Rate Mortgage
  • Refinance
  • Interest Rate

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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