A mortgage renewal happens when your current mortgage term ends and you must choose a new term to continue your loan. In Ontario, most mortgages renew every few years, making this an important opportunity to review your financial situation and future plans.
Many homeowners renew automatically with their existing lender because the process feels simple. While this convenience can save time, it may also limit your ability to review better terms or adjust your mortgage to better suit your current needs.
What Is a Mortgage Renewal?
Mortgage renewal is the process of selecting a new mortgage term once your existing term reaches its maturity date. The mortgage balance typically stays the same, but the interest rate, term length, and conditions may change.
In most cases, renewing with the same lender does not require requalification, income verification, or a home appraisal. This makes renewal easier than applying for a new mortgage, but it also means important details can be overlooked if the offer is not reviewed carefully.
When to Start Thinking About Mortgage Renewal
Most lenders allow mortgage renewal discussions up to 120 days before the maturity date. This early renewal window gives homeowners time to review options without pressure.
Homeowners across Ontario, including Vaughan, Markham, Richmond Hill, and Newmarket, often receive renewal notices that include only one rate and term. These notices are offers, not obligations. Starting early allows you to explore alternatives and make a decision that aligns with your goals.
Mortgage Renewal Options Available to Homeowners
At renewal, homeowners generally have three main options.
Renewing With Your Current Lender
Many homeowners choose to renew with their existing lender for convenience. While this option is simple, it is still important to review the offered rate, term length, and mortgage features.
Negotiating a New Mortgage Term
Some lenders are open to adjusting rates or terms when asked. Negotiating may provide improved flexibility or better alignment with your financial plans.
Switching Lenders at Renewal
Homeowners are not required to stay with their current lender at renewal. Switching lenders may offer different mortgage features or structures, depending on your needs.
Mortgage Renewal vs Refinancing
Mortgage renewal and refinancing are often confused, but they serve different purposes. Renewal keeps the existing mortgage balance the same while selecting a new term. Refinancing changes the mortgage structure and may increase the loan amount, adjust the amortization period, or provide access to home equity.
Homeowners planning renovations, debt consolidation, or major financial changes may consider refinancing instead of a standard renewal.
How Interest Rates Affect Mortgage Renewal Decisions
Interest rates play a central role during mortgage renewal. Fixed-rate mortgages offer predictable payments, while variable-rate mortgages fluctuate based on market conditions.
Fixed-Rate Mortgages at Renewal
Fixed rates provide stability and consistent payments over the term, which can be appealing for homeowners who value predictability.
Variable-Rate Mortgages at Renewal
Variable rates change with the market and may offer flexibility, but payments or interest costs can fluctuate over time.
Choosing between fixed and variable rates depends on income stability, financial goals, and comfort with potential rate changes.
Why Reviewing Your Mortgage Renewal Matters
Automatically renewing without review may limit your ability to adjust mortgage features such as prepayment privileges, portability, or term length. Even small differences in rates or conditions can affect long-term affordability.
Reviewing your renewal ensures your mortgage continues to support both current needs and future plans.
Common Mortgage Renewal Mistakes to Avoid
Some homeowners renew without comparing options or reviewing contract details. Others focus only on interest rates and overlook flexibility features that may matter later.
Taking time to review your mortgage renewal can help prevent limitations that may affect future decisions.
Frequently Asked Questions
- What is a mortgage renewal?
A mortgage renewal is the process of choosing a new mortgage term when your current term ends. - Do I have to stay with my current lender at renewal?
No. Homeowners in Ontario can choose to switch lenders when renewing their mortgage. - When should I start reviewing renewal options?
Most lenders allow renewal discussions up to 120 days before the mortgage maturity date. - Is mortgage renewal the same as refinancing?
No. Renewal keeps the mortgage balance the same, while refinancing changes the loan structure or amount. - Does renewing a mortgage require requalification?
Requalification is usually not required when staying with the same lender but may be required when switching lenders.
If your mortgage renewal is approaching, speaking with an SMM Mortgage advisor can help you review your options clearly before choosing your next term.