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Smarter Mortgages
Common Mistakes When Renewing Your Mortgage – And How to Avoid Them
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Most Canadian homeowners will go through a mortgage renewal multiple times throughout their homeownership journey. But even though it’s a routine step, many people fall into costly traps — missing out on savings or ending up with terms that don’t fit their financial goals.
In this guide, we’ll walk you through how to avoid the most common mortgage renewal mistakes and give you 6 expert-backed tips to help you confidently renew your mortgage — without leaving money on the table.
📆 Timeline of the Mortgage Renewal Process – What to Do Month-by-Month
🗓️ 4 Months Before Renewal
- Mark your renewal date on your calendar
- Start reviewing current mortgage rates
- Check your lender’s early renewal policies
📊 3 Months Before Renewal
- Reach out to your lender for early renewal offers
- Speak with a mortgage broker for rate comparisons
- Request updated mortgage pre-approval (if switching)
🔍 2 Months Before Renewal
- Compare new lenders’ terms, rates, and fees
- Decide on fixed vs variable interest strategy
- Evaluate your amortization and payment frequency
✅ 1 Month Before Renewal
- Finalize your chosen lender and rate
- Review the renewal contract carefully
- Submit signed documents and update banking info
📌 Tip: Use this timeline to stay ahead of deadlines, avoid last-minute stress, and make smarter renewal decisions.
What Is a Mortgage Renewal?
A mortgage renewal happens at the end of your mortgage term — usually every 1, 3, or 5 years — when your contract expires. Unless you’ve fully paid off your loan, you’ll need to renew it with your current lender or switch to a new one to keep making payments.
The renewal is your chance to negotiate better terms — including your interest rate, amortization period, and payment frequency. It’s a golden opportunity to save money, pay off your mortgage faster, or improve your overall financial flexibility.
Top Mistakes Canadians Make When Renewing a Mortgage
Renewing a mortgage isn’t hard, but these common missteps can cost you thousands over time:
1. Automatically sticking with your current lender
Most homeowners don’t shop around, assuming their current lender will offer the best deal. That’s rarely the case.
2. Accepting the first renewal offer without question
Lenders often send a renewal offer in the mail and hope you’ll just sign it. Don’t — it’s likely not their best rate.
3. Waiting until the last minute
Renewals sneak up fast. If you don’t prepare at least 3–4 months in advance, your options narrow significantly.
4. Ignoring amortization and payment flexibility
You can reduce your total interest by shortening your amortization or switching to biweekly payments — but most people miss this window.
5. Failing to adjust for life changes
Getting married, starting a business, or expecting a baby? Your mortgage should evolve with your lifestyle.
6. Skipping professional advice
Trying to navigate renewals solo might seem simple — but a mortgage broker can help you secure better rates and find hidden opportunities.
🚫 Common Mortgage Renewal Mistakes to Avoid
🔁 Automatically Renewing with Your Current Lender
Many homeowners accept the lender’s offer without shopping around — often missing out on lower rates elsewhere.
Many homeowners accept the lender’s offer without shopping around — often missing out on lower rates elsewhere.
📬 Accepting the First Offer You Receive
Renewal letters rarely contain your lender’s best rate. Always negotiate or compare quotes.
Renewal letters rarely contain your lender’s best rate. Always negotiate or compare quotes.
⏳ Waiting Too Long to Start
Leaving renewal to the last minute limits your options and negotiating power.
Leaving renewal to the last minute limits your options and negotiating power.
📄 Not Revisiting Your Mortgage Terms
Sticking with the same amortization or payment frequency without reassessing may cost you more over time.
Sticking with the same amortization or payment frequency without reassessing may cost you more over time.
🔮 Ignoring Upcoming Life Changes
Life events like moving, job changes, or family planning can affect which mortgage structure suits you best.
Life events like moving, job changes, or family planning can affect which mortgage structure suits you best.
🤝 Not Speaking With a Mortgage Expert
A quick call with a broker could reveal better rates, incentives, or features you weren’t aware of.
A quick call with a broker could reveal better rates, incentives, or features you weren’t aware of.
📌 Tip: Use this checklist as a reminder of what to avoid — and revisit it each time your mortgage is up for renewal.
6 Expert Tips to Get Your Mortgage Renewal Right
Let’s flip the script. Here are the best practices every Canadian should follow to master their mortgage renewal.
✅ Tip 1: Start Early
Don’t wait for your renewal letter to arrive. Most lenders let you lock in a rate 90–120 days in advance. This helps you beat rate hikes and gives you time to shop around.
🔍 Tip 2: Compare Offers from Other Lenders
Even if your current lender gives you a decent rate, chances are another lender can do better. Use renewal time to:
- Explore fixed vs. variable rates
- Check for cashback promotions
- Negotiate perks like prepayment privileges or portability
📋 Comparing Lender Offers – Rate, Term, Features, Penalties
| 🏦 Lender | 💸 Interest Rate (5-Year Fixed) | 📆 Term & Amortization | ⚙️ Features | ⛔ Penalties |
|---|---|---|---|---|
| Major Bank A | 5.39% | 5-year fixed, 25 years | Prepayment up to 15%, Online Access, Portability | High (IRD applies) |
| Credit Union B | 5.24% | 5-year fixed, 20–30 years | Flexible terms, In-branch support | Moderate (some flat fee options) |
| Online Lender C | 4.99% | 5-year fixed, 25 years | Low rates, Quick approvals, Cashback available | Strict (limited flexibility) |
📌 Tip: Don’t just compare interest rates — also look at features, fees, and how easily you can break or modify the loan.
📉 Tip 3: Reevaluate Your Amortization Schedule
Renewals are your chance to reduce your amortization from 25 to 20 years — or even less. This will increase your payments slightly, but save you thousands in interest long-term.
🔁 Tip 4: Adjust Your Payment Frequency
Consider switching from monthly to accelerated biweekly payments. This means you’ll make the equivalent of 13 monthly payments per year, which helps you pay off your mortgage faster.
📊 Impact of Accelerated Biweekly vs Monthly Payments Over 5 Years
| 📅 Payment Frequency | Payments per Year | Annual Mortgage Payment | Total Paid Over 5 Years | Interest Saved (Est.) |
|---|---|---|---|---|
| 📆 Monthly | 12 | $24,000 | $120,000 | – |
| 🗓️ Accelerated Biweekly | 26 | $26,000 | $130,000 | ~ $3,000 – $5,000 |
📌 Note: Based on a sample mortgage of $400,000 at 5.24% over a 25-year amortization. Actual results may vary by lender and prepayment terms.
🔮 Tip 5: Think About Future Plans
Planning to move, renovate, retire, or change jobs? These life events can affect your ideal mortgage type. For example:
- A shorter term with low penalties could be safer if you plan to sell soon.
- A portable mortgage makes sense if you expect to buy another home.
🤝 Tip 6: Talk to a Mortgage Expert
Renewing a mortgage isn’t just about signing papers — it’s a strategic decision. Working with a broker gives you access to exclusive rates, lender insights, and personalized advice at no cost to you.
📞 Talk to a Mortgage Expert
Ready to renew? Don’t go it alone. Speak with a licensed mortgage expert who can help you compare rates, explore flexible options, and lock in a plan that works for your future.
✅ Renew With ConfidenceNavigating the Renewal Process Like a Pro
Here’s a quick cheat sheet:
- 4 months before renewal: Start researching rates and getting quotes.
- 2–3 months before renewal: Speak with a broker and gather documents.
- 1 month before renewal: Finalize your decision and lock in the best terms.
🗓️ Mortgage Renewal Planning Checklist – Month-by-Month
📅 4 Months Before Renewal
✅ Mark your renewal date in your calendar
✅ Start monitoring interest rate trends
✅ Research different lenders and current promotions
✅ Mark your renewal date in your calendar
✅ Start monitoring interest rate trends
✅ Research different lenders and current promotions
📅 3 Months Before Renewal
✅ Contact your current lender for an early offer
✅ Compare quotes from mortgage brokers or banks
✅ Decide whether to stay or switch lenders
✅ Contact your current lender for an early offer
✅ Compare quotes from mortgage brokers or banks
✅ Decide whether to stay or switch lenders
📅 2 Months Before Renewal
✅ Review your budget and financial goals
✅ Consider changing amortization or payment frequency
✅ Get pre-approval or lock in a new rate
✅ Review your budget and financial goals
✅ Consider changing amortization or payment frequency
✅ Get pre-approval or lock in a new rate
📅 1 Month Before Renewal
✅ Finalize paperwork with your chosen lender
✅ Review all contract terms in detail
✅ Set up your new payment schedule
✅ Finalize paperwork with your chosen lender
✅ Review all contract terms in detail
✅ Set up your new payment schedule
📌 Tip: Set reminders for each stage so you don’t miss a chance to save or negotiate a better deal.
Frequently Asked Questions
🟦 What’s the #1 mistake homeowners make at renewal?
Not shopping around. You could save thousands just by comparing offers.
🟦 Can I change my mortgage type during renewal?
Yes! You can switch from fixed to variable, adjust your amortization, or change payment frequency.
🟦 Is switching lenders during renewal a hassle?
Not at all. You won’t have to requalify if your mortgage is up for renewal, and your new lender may even cover some legal fees.
Final Thoughts: Don’t Sleep on Your Renewal
Your mortgage renewal might seem like routine paperwork, but it’s a big financial decision — one that can either cost or save you money for years to come. Don’t make the mistake of simply signing the first offer that lands in your inbox.
Be proactive. Shop around. Ask questions. And talk to someone who lives and breathes this stuff.
💬 Need help renewing smart? We’re here to guide you every step of the way — and help you walk away with a deal that actually works for you.
