My mortgage is up for renewal. What should I do?

Many Canadians might be inclined to take the easy route when their mortgage comes up for renewal. The renewal notice arrives, they sign the form, and life goes on—no fuss, no stress, and often, no savings.

But with household budgets feeling the pinch and average Canadian mortgage rates markedly higher than they were five years ago, that autopilot approach likely won’t cut it for your next renewal. 

But here’s the good news: mortgage renewal isn’t just paperwork—it’s an opportunity to take a fresh look at your financial goals and your mortgage needs and maybe even score a better deal.

Whether you’re trying to lower your payments or shave years off your amortization, mortgage renewal is the ideal time to do it.

The basics of renewing your mortgage

Here are some questions you should review before renewing your mortgage.

What does it mean when your mortgage comes up for renewal?

When your mortgage term ends—typically after one to five years—you’ll need to renew the remaining balance for a new term. Unless you fully pay off your home loan, the mortgage will continue under new conditions for the renewal term.

What’s the difference between your mortgage term and amortization?

Your amortization is the total time it takes to pay off your mortgage—usually 25 or 30 years. The term is a shorter period (often three or five years) during which you commit to a specific rate and lender. When the term ends, you renegotiate or renew.

What is a typical mortgage renewal timeline?

Banks and other federally regulated lenders are legally required to notify you at least 21 days before your term ends. But most allow you to renew your mortgage early without penalty, starting 120 to 180 days before maturity—giving you lots of time to negotiate or start shopping around.

What are the current mortgage rates?

Mortgage rates change frequently based on economic trends and the Bank of Canada’s key interest rate. You can check out Tangerine’s current Mortgage rates here.

What are your options for mortgage renewal?

When your mortgage comes up for renewal, you’ve got choices. Here are the most common options:

• Stay with your current lender. It’s the path of least resistance, and many homeowners default to this. But convenience might come at a cost—don’t assume their offer is the best available.
• Negotiate a better rate. If you’d like to stay put, but think you can do better, ask. Lenders often leave some wiggle room in their initial offer. Use competing offers to negotiate. Start contacting lenders three to four months before your mortgage matures. This gives you time to compare multiple offers and avoid getting automatically renewed at a potentially higher rate.
  • Pro tip: When shopping around, ask lenders for a rate hold, which guarantees you a rate for a specified period of time. A rate hold protects you from rising interest rates but still lets you take advantage if rates fall—so there’s no downside.
• Switch lenders. Sometimes, switching can land you a lower rate or better conditions (such as more flexible prepayment options). However, switching lenders also comes with extra steps. You’ll need to complete an application and provide documentation, and you may face costs such as appraisal, legal and transfer fees. (To sweeten the deal, some lenders will cover these costs or offer cash-back incentives.) Take the time to speak to each lender and get a detailed walkthrough of the numbers, so you fully understand how the offers compare.
• Change your mortgage type or term. Now’s the time to reconsider a fixed vs. variable rate, or if you want to adjust the length of your term.
• Make a lump-sum payment. Many mortgages allow a lump-sum prepayment at renewal without penalty. So, if you’ve come into extra cash—a bonus, an inheritance or savings—consider using it to reduce your principal. This can lower your interest costs significantly over time.

Want to test how lump-sum payments or new rates could impact your monthly payment? Try Tangerine’s Mortgage Payment Calculator.

Key considerations when renewing your mortgage

Become familiar with these important factors before you renew so you can make an informed decision.

1. Interest rate environment

The Bank of Canada’s key rate affects mortgage rates across the country. (It directly affects variable-rate mortgages and can have an indirect effect on fixed-rate ones.) When rates change, different lenders offer different deals. While no one has a crystal ball, staying informed helps you make a smart move. Keep an eye on the Bank of Canada’s scheduled rate announcements—which happen eight times a year—to anticipate upcoming changes.

2. Your current financial picture

Has your income changed? Are you carrying more (or less) debt? Consider your ability to increase payments, pay off your mortgage faster or protect your budget from potential rate hikes. Job stability and budget flexibility should all factor into your decision.

3. Life plans on the horizon

Are you planning a renovation? Starting a family? Thinking of moving? If you might want to break your mortgage early—for a move, refinance or change in plans—a shorter-term or variable-rate mortgage (which usually has lower prepayment penalties than fixed-rate mortgages) may be prudent.

4. Fine print and flexibility

Don’t just focus on the rate—read all the terms and conditions. For example:

• Prepayment privileges allow you to make extra payments or increase your regular payments without penalties. These features can help you pay off your mortgage faster.
• Portability lets you transfer your mortgage if you move.
• Prepayment Penalties matter if you break the contract early.
• “Blend and extend” mortgages let you renew your contract early at a “blended” rate, combining your existing mortgage rate with a currently available one.
• Some mortgages allow you to skip a payment occasionally without penalty (although interest still accrues on the outstanding amount).
• You may be permitted to refinance your mortgage in order to, for example, borrow additional funds, take advantage of lower rates, change your monthly payments or extend your amortization.

Even if some of these options may not affect your monthly payment, they can absolutely impact the long-term cost of your mortgage.

Tips for renewing your mortgage

Consider these handy tips before you sign on the dotted line on your mortgage renewal.

• Start early. Don’t wait for that renewal letter. Set a reminder 120 days before your term ends to begin your research.
• Do your homework. Compare rates online and check out tools like Tangerine’s Mortgage Payment Calculator to test how different rates and terms affect your payments and overall cost.
• Ask for a rate hold: Get a lender to lock in a rate early—even if you don’t end up using it.
• Think beyond the rate. Total cost, flexibility and alignment with your goals matter just as much.
• Consider working with a mortgage broker (if needed). They can help you find deals and navigate paperwork, which is especially helpful if your situation is complex.
• Don’t accept the first offer. Lenders often leave room to improve their offer. Bring competitive quotes to the table and ask for a better rate or more flexible terms.

Mortgage renewal mistakes to avoid

Here are some common mortgage renewal pitfalls to steer clear of:

• Renewing without review. Automatically renewing a mortgage offer without looking at your options could cost you thousands in the long run. Don’t let convenience tempt you into making an uninformed decision.
• Focusing only on monthly payments. A lower monthly bill doesn’t always mean a better deal. Look at the total interest cost, flexibility and how the mortgage aligns with your goals.
• Ignoring prepayment and portability features. You might not plan to move or make extra payments—but life happens. Flexibility matters.
• Underestimating the cost of switching. Yes, a new lender might offer a lower rate—but will you face legal fees or appraisal costs? Ask if they’ll cover switching expenses.
• Starting the process too late. Waiting until the last minute can limit your options—or force you into a deal you didn’t want if your current mortgage auto-renews.

Renewing your mortgage with Tangerine

Explore your options with Tangerine. Apply online and secure your Mortgage. Whether your current Mortgage is with us or you’re thinking of switching from another lender, our Mortgage Specialists are here to guide you through your options, answer your questions, and help you make the right choice for your financial goals. With competitive Mortgage rates, flexible prepayment options and useful tools, we’ll help you make the most of your renewal—without guesswork.