Mortgage Renewal
Renegotiate your old terms to meet your current needs
A mortgage renewal is done at the end of your mortgage term when you haven’t fully paid off your mortgage. Your mortgage contract will be renewed with possible term and interest rate changes. When your mortgage is up for renewal, you might want to consider taking advantage of any features that your mortgage lender offers, such as mortgage prepayment allowances. You might also negotiate your mortgage renewal rate or shop around with other lenders for a better rate.
Important considerations
Changing interest rates
Your lender’s interest rate may change when you renew your mortgage.
Potential penalties
There are penalties if you attempt to renew your mortgage before the term is over.
Automatic renewals
Your renewal statement will state if your mortgage will be automatically renewed, which means that your mortgage will automatically renew if you do not take any action. Automatic renewals indicate that you accept the terms and rates that your lender offers, which might not always be the most favourable.
Frequently Asked Questions
How does renewing a mortgage work?
As your mortgage term comes to an end (with the most common term being five years), you will receive a renewal statement from your mortgage lender. Your lender must send you this statement within 3 months before your mortgage term ends.
This renewal statement will have information on your mortgage, such as your mortgage balance, term length, and interest rate. This is the interest rate that they are offering you for your next term.
If you choose not to negotiate and agree to the rate and term in your renewal statement, all you will need to do is sign the mortgage renewal contract. Depending on your lender, you may receive your contract in the mail to sign and return, or you may have the option to sign it online.
Will my interest rate change when I renew my mortgage?
Depending on your lender, your interest rate cannot increase within 30 days of your maturity date. This means that if rates rise, the mortgage rate offered to you will still stay the same. If rates decrease, your mortgage lender may provide you with a lower rate on the date of renewal.
This rate may be their lowest posted rate, but that might not always be the lowest mortgage rate available. You can negotiate to get a discounted rate at your current lender to possibly get a lower mortgage renewal rate. Your renewal statement may also include other mortgage options, such as different term lengths or offers.
Can I be denied a mortgage renewal?
You can be denied a mortgage renewal, as mortgage renewals are not guaranteed. Roughly 3% of mortgage renewals are denied. The approval rate is even lower for the same lender refinancing, with 18.6% being denied a mortgage refinance.
If your financial situation has deteriorated, such as if you have missed mortgage payments on your previous mortgage, lost your job, or now have a significantly lower credit score, your mortgage lender might choose not to renew your mortgage.
If you’ve been denied a mortgage renewal, there are a few options that you can take. You could meet with your current lender to see if accommodation could be made, try to find a cosigner, or switch to another lender. You may have to consider a B-Lender or a private mortgage lender, which often have higher rates and fees
Before you renew:
Before letting your mortgage automatically renew or accepting the same terms as your previous mortgage, consider doing the following:
Shop around for better rates with other lenders
Negotiate with your lender for a better rate or shorter term
Exploring available features such as mortgage prepayment allowances
Renewal tips
At renewal, you can choose to negotiate with your lender or switch to a different lender. There is also a chance you can be denied at renewal.
Negotiation tips:
Shop around for better rates
Review your renewal agreement carefully
Don’t let your mortgage auto-renew without negotiating your rates or term
If you are denied a mortgage renewal:
Meet with your lender to discuss accommodations
Find a co-signer
Look a private lenders
Why work with a mortgage broker when renewing your mortgage?
Market knowledge
A broker understands the ins and outs of the local market, interest rates and current mortgage trends, meaning they will know whether and where to look for better offers.
Peace of mind
Working with someone you can trust to help you navigate the renewal process lets you rest assured you are making the best possible decision for the short- and long-term.
Expert troubleshooting
If you are denied a renewal or are having trouble making a deal with your lender, a mortgage broker can step in to remedy the situation using a number of strategies.
Related Services
Refinancing
Consolidate debt or save money.
Refinancing can leave more money in your pocket—if done strategically.
Private Lending
Consider options outside of traditional loans.
If you’re unable to secure a mortgage through the usual means, a private lender may be an option.
Residential Mortgages
Homebuyer services.
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