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.
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
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
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)