Mortgage Renewal in Canada: 5 Questions to Ask Before You Renew

If your mortgage renewal in Canada is approaching, it’s important to look beyond the renewal offer from your current lender.

A mortgage renewal is an opportunity to review your interest rate, mortgage terms, financial goals, and other borrowing needs before committing to your next term. You don’t have to automatically renew with your existing lender — you can shop around and compare other options. (⁠Canada)

At Sherwood Mortgage Group, we help homeowners understand their options so they can approach their mortgage renewal with the information they need to make a confident decision.

Here are five questions to ask before renewing your mortgage.

1. What Mortgage Rates Are Available Beyond My Current Lender?

Your renewal offer isn’t necessarily the only option available.

Canadian homeowners can compare mortgage options from different banks, credit unions, monoline lenders, and other mortgage providers. The Financial Consumer Agency of Canada recommends shopping around before your mortgage term ends rather than waiting until your renewal date. (⁠Canada)

A mortgage broker can help compare available options and determine whether switching lenders could make sense for your situation.

2. Should I Choose a Fixed or Variable Mortgage?

Your mortgage renewal is also an opportunity to reconsider the type of mortgage you have.

A fixed-rate mortgage can provide payment stability, while a variable-rate mortgage may offer different potential benefits and risks depending on interest-rate conditions.

The right choice depends on more than the rate. Your budget, financial goals, comfort with payment changes, and plans for the next several years should all be considered.

A Sherwood mortgage advisor can help you understand the differences and compare mortgage options based on your circumstances.

3. What Will It Cost If I Need to Break My Mortgage?

Life can change during a mortgage term.

If you might sell your home, refinance, or make significant changes to your mortgage before the next term ends, ask about mortgage prepayment penalties and other costs.

Depending on the mortgage and lender, costs can include prepayment penalties, discharge fees, appraisal fees, and other administrative expenses. (⁠Canada)

Understanding these costs before renewing can help you choose a mortgage that provides the flexibility you may need.

4. Should I Use My Renewal to Consolidate Debt or Access Home Equity?

Your mortgage renewal is a good time to review your overall financial picture.

If you’re carrying high-interest debt or considering a major expense, you may want to explore options such as mortgage refinancing or accessing home equity.

Debt consolidation can sometimes reduce the interest cost compared with higher-interest borrowing, but it also increases the amount secured against your home. Your overall financial situation should be considered before making this type of change.

5. What Will It Cost to Switch Mortgage Lenders?

Switching lenders may provide access to different rates or mortgage features, but it’s important to look at the complete cost.

Depending on your situation, switching can involve appraisal, registration, discharge, legal, or other fees. Some lenders may cover certain switching costs, so it’s worth comparing the overall value rather than looking at the interest rate alone. (⁠Canada)

And if you’re considering a straight switch at renewal, current rules are different from what many homeowners may remember. For uninsured mortgages, OSFI no longer requires the prescribed minimum qualifying rate for a straight switch between federally regulated lenders when there is no increase to the loan amount or amortization period. (⁠OSFI)

Don’t Wait Until Your Renewal Date

A mortgage renewal shouldn’t be treated as a paperwork exercise.

It’s an opportunity to ask whether your current mortgage still fits your financial goals — and whether another mortgage option may be more suitable.

The Financial Consumer Agency of Canada recommends starting the process a few months before your mortgage term ends so you have time to compare options. (⁠Canada)

At Sherwood Mortgage Group, our mortgage advisors can help you review your current mortgage, compare available options, understand the costs of switching, and determine what makes sense for your next term.

Renewing soon? Start the conversation before your renewal date.

Connect with Sherwood Mortgage Group for a mortgage renewal review and explore your options before signing your next term.