Mortgage Renewal
Quick Definition
Renegotiating mortgage terms at the end of a term without refinancing the full mortgage.
Full Explanation
Mortgage renewal occurs at the end of your mortgage term when your current agreement expires. The outstanding balance must either be renewed with your current lender, transferred to a new lender (mortgage switch), or paid off in full. Renewal is the best time to negotiate terms since no prepayment penalties apply. Lenders typically send renewal offers 120 days before maturity. You are not obligated to renew with your current lender — shopping around at renewal can save significant money. Insured mortgages can be transferred without re-qualifying for the stress test at renewal.
Related Terms
Loan Term
The length of time you agree to specific loan conditions before renewal.
Amortization
The total length of time to pay off a loan through scheduled payments.
Mortgage Stress Test
A Canadian requirement to qualify for a mortgage at a higher rate than the contract rate.
Refinancing
Replacing an existing loan with a new one, usually to get a better rate or access equity.
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