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11 minute read Published on Sep 1, 2026 by BrokerLink Communications
Buying a home and making mortgage payments is a big responsibility. But what some first-time home buyers may not be aware of is that their mortgage term will eventually expire and a new mortgage contract will need to be signed. Over the life of your mortgage, you’ll likely go through this process several times.
As your mortgage renewal date approaches, often 90 to 120 days in advance, your lender will typically send you a renewal offer. At that point, you have a few choices: you can accept the offer as-is, try to negotiate better terms or switch to a different lender. In many cases, staying with the same lender and keeping the loan amount the same won’t require you to re-qualify, while switching lenders or increasing your mortgage usually will.
With roughly 60% of Canadian mortgages expected to renew in 2025–2026, many homeowners are paying closer attention to their renewal options. Read on to learn more about the mortgage renewal process, including what you can and can’t change.
Before diving into the renewal process, let’s help clear up one of the most common sources of confusion: the difference between your mortgage term and your amortization period. Here's what you should know:
Your amortization period is the total length of time it will take to pay off your mortgage in full. In Canada, this is most often 25 years, though some uninsured mortgages may allow up to 30 years. This timeline does not reset every time you renew unless you specifically change it within the lender and regulatory rules.
Your mortgage term, on the other hand, is much shorter. Terms are typically one to five years, with five-year terms being the most common. During each term, your interest rate, payment amount and key conditions are locked in. When that term ends, you must renew or replace the mortgage to continue making payments.
A mortgage renewal is simply the process of signing a new term agreement for the remaining balance of your mortgage. Your principal will continue to be paid down according to the amortization schedule unless you make any changes at renewal.
Typical amortization periods range from 10 to 30 years, while mortgage terms are usually one to five years. However, within these timeframes, you’ll need to renew your mortgage several times, depending on your individual agreement.
Federally regulated lenders are required to send a renewal statement at least 21 days before your mortgage term ends. In practice, most lenders reach out much earlier, often 90 to 120 days ahead of your renewal date. This early window is important because it gives you time to compare options and, in many cases, hold an interest rate while you decide. A typical renewal statement should outline:
Your remaining mortgage balance
The proposed interest rate and term
Your new payment amount
The maturity date of your current term
If you stay with your current lender and don’t increase your mortgage amount, the process is often simple and the paperwork is minimal. However, if you plan to switch lenders, renew early or make structural changes, you’ll usually need to gather documents such as:
Your current mortgage statement
Property tax information
Government-issued ID
Proof of active home insurance
Proof of income (recent pay stubs or tax documents)
When your mortgage term ends, your renewal gives you a chance to reassess your rate, terms and overall mortgage structure. Here are the main options Canadian homeowners typically consider at renewal:
This is the simplest option. Your lender sends a renewal offer, you sign it and your new term begins. It’s quick and usually requires little to no paperwork. Plus, if you’re keeping the same lender and not increasing your mortgage amount, you typically don’t need to re-qualify. The downside is that the offered rate may not be the most competitive. Lenders often assume convenience will outweigh comparison shopping.
It’s essential that you know that you’re allowed to negotiate before accepting a renewal. Many lenders are willing to adjust the rate or improve terms, especially if you’ve been a reliable borrower. You can ask about:
A lower interest rate
A different term length
Changes to payment frequency
Better prepayment privileges
If you have any quotes from other lenders, they can help you strengthen your position, even if you ultimately decide to stay where you are.
Some lenders allow you to renew before your term ends using what’s known as a blend-and-extend. This blends your existing rate with a new rate and extends the term.
This can help you avoid penalties for breaking your mortgage early, but the blended rate may be higher than what’s available on the open market. It’s often used when rates are rising and you’re looking for payment certainty.
At renewal, you’re also free to move your mortgage to a new lender. This often means better rates or terms, but it usually takes a bit more work. You’ll likely need:
A new application
Re-qualification
Legal and administrative steps to transfer the mortgage
There’s usually no penalty for switching at renewal, though you may face costs such as appraisal or legal fees. Some lenders may cover part or all of these costs, up to a limit.
Refinancing means replacing your existing mortgage with a new one, but often for a larger amount. This might be done to help homeowners consolidate debt, access home equity or change the mortgage structure. Refinancing can happen at renewal or mid-term, but it usually involves:
Full re-qualification
Appraisal and legal fees
Possible penalties if done before term end
If you’re buying a new home, some mortgages are portable, meaning you can move your existing rate and terms to the new property. If you need additional funds, the new portion may be blended at a different rate.
Portability rules vary by lender, but most require you to sell your current home and purchase the new one within a specific time window, often 30 to 120 days. If the timing doesn’t line up or the new property doesn’t meet the lender’s requirements, portability may not be allowed.
If you don’t take any action before your term ends, many lenders will automatically renew your mortgage. This often happens at a higher interest rate and for a shorter term, such as six months or one year. Because the rate and term are set by the lender, it leaves you with little to no room to negotiate.
Automatic renewal keeps your mortgage in good standing, but the rate and term may not be as competitive as what you could get by reviewing your options. And once the new term starts, breaking it early may trigger penalties.
This is something a lot of homeowners worry about. Whether you need to re-qualify mostly comes down to what you’re changing. Here's how you can tell:
You typically don’t need to re-qualify or pass the mortgage stress test again if you:
Stay with the same lender
Keep the mortgage amount the same
Don’t materially change the structure
This makes staying with your current lender faster and less paperwork-heavy.
You’ll usually need to re-qualify if you:
Switch to a different lender
Increase your mortgage amount
Refinance or add a HELOC component
In these cases, lenders apply the mortgage stress test, meaning you must qualify at the higher of:
Your contract rate plus 2% or
The federal minimum qualifying rate (MQR)
Recent federal changes mean some straight switches at renewal may be exempt from the prescribed minimum qualifying rate (MQR), but eligibility depends on factors like loan type and lender rules.
Even without increasing your mortgage, certain changes can still affect approval when switching lenders, including:
A drop in income
Adding or removing a borrower
A shift in your credit profile
When people think about mortgage renewal, they’re usually focused on the interest rate. But it’s the fees that come up later that people don’t always expect:
If you renew before your current term ends, there may be a penalty. With a fixed-rate mortgage, the penalty is usually the greater of three months’ interest or the interest rate differential (IRD). IRD penalties can be significant, especially if rates have fallen since you locked in.
With a variable-rate mortgage, the penalty is often three months’ interest, which is usually smaller than IRD penalties on fixed-rate loans. However, some lenders may offer early-renewal or blend-and-extend options that let you avoid these penalties, but the trade-off is that the blended rate may be higher than what’s available elsewhere.
If you switch lenders right at the end of your term, there’s usually no penalty for leaving your current lender. That said, switching isn’t always free, so you may be charged:
Discharge fees: up to $400
Assignment fees: often $5 to $400
Appraisal fees: commonly $250 to $350+
Legal fees: between $400 to $2,500
To win your business, many lenders will cover some or all of these costs, usually up to a set dollar amount. Always confirm what’s covered in writing and whether any conditions apply.
Depending on the lender and how your mortgage is structured, you may also run into:
Administrative or processing fees
Title insurance updates
Requests for proof of property taxes and active home insurance
When you’re comparing renewal options, it helps to look at the total cost over the full term, not just the headline rate.
Your renewal isn’t just about signing a new rate. It’s also one of the few times you can adjust how your mortgage works without breaking your mortgage contract. Let's take a closer look:
At your renewal, you can choose:
A shorter or longer term, usually between one and five years
A fixed or variable interest rate
Shorter terms can offer lower mortgage renewal rates but less certainty, while longer terms provide more stability, but often at a higher rate.
You can usually change how often you make your payments. Common options include monthly, biweekly or accelerated biweekly payments. With accelerated payments, even though each payment is slightly higher, they can help you pay off your mortgage faster and reduce interest over time.
Most mortgages also give you some room to make extra payments to reduce your principal balance. This often includes:
Lump-sum payments, usually up to 10% to 20% of the original mortgage amount each year
The option to increase your regular payment within set limits
These features can be useful if your income has gone up or if you receive occasional lump sums, like work bonuses.
At your renewal, you may be able to reset your amortization, as long as your lender and the rules allow it. Some homeowners may choose to shorten their amortization to pay off their mortgage faster, while others may lengthen it to lower their monthly payments. However, extending your amortization may require approval and, in some cases, re-qualification.
Some homeowners may also use their renewal to change how their mortgage is set up. For example, you might add a Home Equity Line of Credit (HELOC) to access home equity, split your mortgage into separate portions with different rates or terms or remove an existing HELOC if you no longer need it. Because you’re changing the structure of the loan, lenders usually need to review your finances again and you may need to re-qualify under the lender’s current rules.
When your mortgage comes up for renewal, the rate your lender offers isn’t automatically the best one you can get. Consider doing the following:
Before you talk to your current lender, get two or three comparable quotes from other lenders or a mortgage broker. Just make sure you’re comparing the same things, like the term length, fixed or variable rate, prepayment options and any fees.
These quotes can give you a clear sense of what other lenders are offering for the same type of mortgage. They can also give you leverage if you decide to negotiate instead of switching. And remember, the lowest rate doesn’t always lead to the lowest overall cost once fees, penalties and flexibility are factored in.
When you speak with your lender, be clear about what you want. That might include:
Fewer or waived fees
When you’re specific about what you want, it’s easier for the lender to tell you what they can actually change.
If you’re negotiating within your rate-hold window, you have more flexibility. During this window, the rate you’re offered is usually held for you, even if market rates change while you’re comparing options. This means you can take the time to compare offers without worrying about your rates moving while you decide. Plus, if your lender knows you’re actively comparing options, they’re more likely to sharpen their offer.
Negotiation works best when you’re prepared to follow through. That means having your documents ready and understanding what switching would involve, including any fees and re-qualification. Even if you end up staying, being ready to switch puts you in a stronger position when negotiating terms.
When your mortgage is renewed, your lender will usually ask for proof that your home insurance is active and up to date. A standard Canadian home insurance policy usually covers the physical structure of the home against specific risks, such as fire, wind, theft and certain types of water damage, depending on how the policy is written.
However, some types of damage, like overland flooding or sewer backup, are not automatically included. These are typically optional endorsements that need to be added separately. Whether they’re required can depend on the lender, the property and the risk profile of the area.
Beyond the mortgage itself, a renewal can also be a good time to review your home insurance and make sure your coverage still reflects your property and how it’s used. One of our licensed BrokerLink advisors can help you review your policy to make sure it fits your current needs. We can also help you shop around for personalized quotes if it’s time to renew your home insurance policy and explain how mortgage insurance can help protect your home.
With locations across Canada, don’t hesitate to visit us in person. If you can’t make it, feel free to give us a call and speak to a broker over the phone! Alternatively, you can use our free online quote tool to get a competitive insurance quote in minutes!
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