Most Canadian homeowners will face a mortgage renewal at least once—and surprisingly, many don’t take full advantage of this key moment. A renewal is not just about signing a new contract. It’s an opportunity to negotiate better terms, cut interest costs, and realign your mortgage with your life goals. Yet, many borrowers make mistakes that cost them in the long run.

Let’s walk through the common pitfalls of mortgage renewals and how to avoid them.

Understanding Mortgage Renewal

When your mortgage term ends—typically after 1, 3, or 5 years—you don’t pay off the entire loan. Instead, you renew the mortgage with a new term and updated rate. While your lender will usually send you a renewal offer ahead of time, you’re not obligated to accept it. This is your chance to shop around, negotiate better terms, or switch lenders entirely.

Especially in a high-interest environment, being proactive about your renewal could save you thousands.

The 4 Most Common Renewal Mistakes

Automatically renewing with your current lender without exploring other options.
Accepting the first rate offered instead of negotiating for a lower one.
Starting the process too late, which reduces your leverage.
Not reassessing your mortgage terms—like amortization and payment frequency—that might no longer suit your life.

6 Expert Tips to Avoid Mortgage Renewal Mistakes

1. Start Early
Lenders typically send renewal notices 30 days before your term ends. But the smart move? Start 4 to 6 months early. Many lenders will hold a rate for up to 120 days. This gives you time to shop around and lock in a competitive rate.

2. Compare and Negotiate
Even if you’re happy with your lender, use competitor rates as leverage. Don’t be afraid to negotiate. Better yet, work with a mortgage broker who can do the haggling for you.

3. Revisit Your Amortization Schedule
Has your income increased? You might want to shorten your amortization to save on interest. Struggling a bit more financially? Extending the amortization could lower your monthly payments. Renewal is the perfect time to make these adjustments.

4. Adjust Your Payment Frequency
Small changes like switching from monthly to biweekly payments can shave years off your mortgage. This is a great time to align your payment schedule with your cash flow.

5. Factor in Your Life Changes
Planning a career break, expecting a baby, or downsizing? Your mortgage should reflect your life. Think ahead and adjust your loan structure accordingly.

6. Get Professional Advice
There’s no shame in asking for help. A mortgage expert can walk you through your options, explain your renewal letter, and make sure you don’t miss opportunities to save.

Navigating Your Renewal Smoothly

A mortgage renewal is a major financial checkpoint. It’s your chance to fix past decisions, plan for future changes, and potentially save a lot of money. Don’t rush it, don’t ignore it, and don’t settle for whatever lands in your inbox.

Start early. Ask questions. Explore your options. You’ve got this.

Frequently Asked Questions

What’s the biggest mistake people make at renewal?
Not shopping around. Even one percentage point difference in interest could mean thousands of dollars over your term.

Can I switch lenders at renewal without penalties?
Yes. Renewal is your window to switch lenders penalty-free, provided you aren’t breaking your mortgage term early.

Should I go fixed or variable at renewal?
That depends on your risk tolerance and where rates are trending. A broker can help assess what’s best for your situation.

Final Thoughts

Your mortgage renewal isn’t a formality—it’s a money-saving opportunity. Whether it’s a better rate, a more flexible payment schedule, or a smarter amortization plan, small tweaks at renewal can have a big impact.

Don’t renew passively. Renew smart.