- Start looking four to six months before your term ends.
- Compare more than the rate: flexibility, penalties and prepayment options matter too.
- You can usually switch lenders at renewal, so don't just sign the first offer.
1. When to start
Many lenders send a renewal offer well before your term ends, and the offer often arrives with little time pressure to sign right away. Reviewing your options four to six months ahead gives you time to compare and avoid rushing into the first offer. Make a note of your maturity date and ask your lender about early rate holds.
2. What to compare
- Interest rate and term. A lower rate matters, but so does the length of the term.
- Prepayment privileges. How much extra can you pay each year without a penalty?
- Penalty rules. How would breaking the mortgage early be calculated?
- Flexibility. Can you port, increase or refinance if your plans change?
3. Your options at renewal
- Renew with your current lender. Simple, but ask whether the rate offered is their best.
- Switch lenders. At maturity there is usually no penalty to move your mortgage. Some lenders cover legal or appraisal costs for a switch, and switching has become simpler for many borrowers. We'll check what applies to you.
- Refinance. Change your loan amount or amortization, for example to consolidate debt or access equity. This involves qualifying again and may involve costs.
- Change your rate type. Move between fixed and variable if it better suits you now.
4. Fixed or variable?
With a fixed rate your rate stays the same for the term. With a variable rate it follows your lender's prime rate, which moves with the Bank of Canada's policy rate. Neither is always better: it depends on your budget, how much payment change you can handle and your plans. See the latest on our Bank of Canada rates page.
5. What if you need to break your mortgage early?
If you leave a mortgage before the term ends, a penalty usually applies. As a general rule, variable-rate penalties are typically three months of interest, while fixed-rate penalties are the greater of three months of interest or an interest rate differential. How that is calculated varies by lender, so ask for the details in writing before you choose.
Renewal checklist
- Your maturity date, balance, current rate and payment
- Your prepayment history and any privileges left
- Changes to your income, household or credit since you started
- Your plans for the next five years: moving, renovating, paying down faster?