How Does A Mortgage Renewal Work In Canada?

How To Negotiate A Mortgage Renewal

A mortgage contract is one of the most important documents a borrower will sign in their lifetime.

In Canada, a mortgage has shorter terms and longer amortization periods of up to thirty five years.

The goal of almost every borrower is to reduce their amortization period through better terms and conditions in order to pay off their mortgage sooner. This is why at renewal time, borrowers finally have another opportunity to obtain a better mortgage term and interest rate by switching lenders.

When a mortgage has reached its maturity date, the existing lender will mail out a Renewal Statement which offers a new interest rate and new mortgage term. In order to save the most amount of money, borrowers should consult a few different mortgage sources to ensure they are saving money, getting the best terms and conditions and reviewing their financial situation.

In order to find the best mortgage, the best mortgage lender and enter into a more favourable mortgage contract, borrowers should consult other banks, credit unions and a reputable mortgage broker who has access to many different mortgage lenders and who can compare interest rates.
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Here are some terms and conditions you should consider if your mortgage is coming up for renewal or has reached its maturity date.

1. Rate

Most mortgage lenders will provide an extremely competitive rate to borrowers who are switching lenders and pay the legal fees, and appraisal costs in order to change.

2. Terms

Often, mortgage renewal is a time when new mortgage terms can be sought after and negotiated. One major advantage borrowers have at this time is the ability to be more meticulous in their search to find the best mortgage which can provide maximum interest savings over the next few years and ultimately, shorten their overall amortization period.

So, to put it simply, mortgage renewal is the time to look for a better interest rate and better terms and conditions that can help save money and shorten your amortization period.

3. Amortization Period

As a borrower pays down their mortgage they also shorten their amortization period. When a borrower renews their mortgage, they must be careful not to start the amortization period back at twenty-five to thirty years, for example. The name of the game is reducing the amortization period, remember? Since financial institutions are in the business of making money, it's no surprise that this particular booby trap often goes unnoticed.

This is also why working with a mortgage professional like myself can go great lengths to save you money, time and resources and ensure you make the right decision.

Therefore, to summarize, it's essential to understand why you want to renegotiate your mortgage contract at renewal, and ensure you take the opportunity to enter into a more favourable contract every time your mortgages reaches its maturity date.

In fact, having the contract at an end, opens up many more avenues to save money, which is why borrowers should NOT be so quick to sign on the dotted line of the agreement their existing lender presents to them.

Are there any fees to use a broker for your renewal?
There are NO broker fees to renew or switch your mortgage to a better interest rate and better terms.

Documents Required For A Mortgage Renewal
All that is required to receive a better rate is:

• A Renewal Agreement from the existing lender
• ​Documents Required For Financing

Do Lenders Pay Your Legal Fees and Mortgage Renewal Costs?

• Yes, they do. Paid legal fees & appraisal costs through a switch program (conditions apply on switch/transfer products as they must be eligible as a true conventional switch).

Types of Mortgages that can be "Switched/Transferred" + offered Switch/Transfer Rates

• Conventional Mortgages
• Collateral Mortgages (Home Equity Line of Credits borrowers want to merge into one low-interest mortgage at maturity)
• Spousal Buyouts

My Mortgage Process Is Proven to Save You Time and Money
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 A Switch/Transfer application does not need to be completed in person. All applications can be completed over the phone or electronically by Applying Now. Approvals can be available in 24-48 hours.

Sarah was recommended to us by a family member and we could not have been more satisfied with her services. 
She was very knowledgeable and helped us to make sense of what seemed like non-sense to us! She was always there to answer my questions and trust me there were a lot of them! 
Would highly recommend her to anyone and everyone.

Sarah A. Colucci
Mortgage Agent, Lic. M14000929
Mortgage Edge, FSCO Lic. 10680 

Direct: (647) 773-4849
Email: sarah.colucci@mortgageedge.ca

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Types of borrowers I help:

- Salaried borrowers
​- Self employed (BFS) 
- No income borrowers 
- Professionals (Doctors, lawyers, etc.) 
- Investors who own 4+ properties 
- First-time home buyers
- Bruised credit 
- Those going through a divorce or separation. 

We always advocate for your best interests!