What Is A Mortgage Renewal?

Mortgage renewal involves renegotiating and extending an existing home loan agreement with the lender, typically done at the end of the term. In Canada, where the average term length is 5 years within a 30-year amortization period, borrowers often renew their mortgages after multiple terms. While most renewals continue with existing terms, there is room for negotiation between the borrower and lender before finalizing the contract. Changes in market conditions can impact terms like mortgage rates, with rates typically increasing upon renewal due to rising interest rates. Additionally, provincial regulations, such as those in Quebec influenced by the Civil Code, may introduce unique rules affecting mortgage terms. The absence of a standardized process allows borrowers to explore different options and potentially secure more favorable terms or deals.

Mortgage Renewal vs. Mortgage Refinance

Mortgage Renewal: During a mortgage renewal, borrowers extend their existing mortgage with the current lender without altering the loan amount or the amortization period.

Mortgage Refinance: Mortgage refinancing involves transferring the mortgage to a new lender or adjusting it with the current lender, potentially changing the loan amount or the amortization period.

Mortgage Renewal