Common Mistakes When Renewing Your Mortgage: 6 Expert Tips

Table of Contents

• Understanding Mortgage Renewal
• Common Mistakes When Renewing Your Mortgage
• 6 Expert Tips to Avoid Common Mortgage Renewal Mistakes
• Navigating Your Mortgage Renewal Process
• Frequently Asked Questions
• Final Thoughts

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Most Canadian homebuyers will go through the renewal process at least once during the lifetime of their mortgage. But despite being a shared experience, many don’t realize how much money can be saved—or lost—depending on the choices made during mortgage renewal. In this guide, we’ll help you avoid costly missteps and make the most of your mortgage renewal in 2025.

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Key Highlights

• Your mortgage renewal is your chance to renegotiate better terms.
• Shopping around could unlock better rates and flexible terms.
• Reviewing amortization and payment frequency helps reduce long-term interest.

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Understanding Mortgage Renewal

A mortgage renewal happens when your current mortgage term ends, but you still owe a balance on your loan. You sign a new contract (typically with a new interest rate) to continue repaying your existing loan.

This is your opportunity to reassess your mortgage terms. Don’t just focus on the rate—you can adjust amortization, payment frequency, and more.

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Common Mortgage Renewal Mistakes

Many borrowers treat renewals as routine—but this is exactly when mistakes happen. Common errors include:

• Auto-renewing with your current lender without comparing rates
• Accepting the first offer without negotiating
• Waiting too late to shop around for better deals
• Renewing only the rate, ignoring other terms like amortization or prepayment privileges

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6 Expert Tips to Avoid Renewal Mistakes

1. Start Early
Begin shopping 3–4 months before your renewal date. This gives you time to compare, negotiate, or switch.

2. Compare More Than Rates
Yes, interest rate matters. But look at fees, prepayment options, and flexibility. Use a mortgage broker if needed.

3. Reassess Your Amortization
Shortening it even by 2–5 years can save you thousands in interest over time.

4. Change Payment Frequency
Switching from monthly to biweekly can reduce interest and help you pay off your mortgage faster.

5. Align With Life Goals
Marriage, job change, family expansion? Consider how future events may affect your ability to commit to a longer or shorter term.

6. Talk to an Expert
A licensed mortgage broker can show you hidden lender offers and make sure you aren’t missing out on savings.

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Navigating the Renewal Process

To avoid mistakes:

• Read your lender’s renewal notice carefully.
• Contact multiple lenders or a broker for competing offers.
• Lock in rates early if rates are rising.

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Frequently Asked Questions

What should I do before renewing my mortgage?
Review your current contract. Know what you like, what you want to change, and what better options exist in the market.

Can I change lenders at renewal?
Yes—and you won’t have to pass the stress test again if your mortgage balance and amortization don’t change.

Is it risky to switch lenders?
Not if you understand the fees (e.g. appraisal or legal costs). Brokers can help you minimize or avoid these costs.

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Final Thoughts

Mortgage renewal is not just a routine paperwork task—it’s a strategic moment to optimize your finances. Avoiding mistakes, starting early, and seeking professional advice can save you thousands.

📌 Pro Tip: Mortgage lenders often offer their worst rates in the renewal notice hoping you won’t negotiate. Don’t fall for it.