Renewing Your Mortgage in Canada: What You Need to Know
Renewing Your Mortgage in Canada: What You Need to Know
If your mortgage is due for renewal soon, you're not alone. In fact, over one million fixed-rate mortgages are set to renew in Canada by 2025. With rising interest rates and shifting market conditions, it’s more important than ever to approach your mortgage renewal with confidence and awareness.
At Kingsway Financial, we’re here to help you navigate this process with ease, whether you're looking to stay with your current lender or explore new options. Here’s a detailed guide to what you need to consider when renewing your mortgage.
Understanding the Mortgage Renewal Process
When your mortgage term is up, you’re faced with several decisions. This is your opportunity to reassess your financial situation and determine the best path forward. Here’s what to keep in mind:
Interest Rates: If you’ve had a fixed-rate mortgage, you may see your monthly payments increase as interest rates have risen since you first signed your mortgage. This could result in a higher overall payment, especially for those who secured lower rates in 2020 or 2021.
Renewal Term: When renewing, you’ll need to choose a new term length (e.g., 1-year, 3-year, 5-year, etc.). It’s important to think about your long-term plans. If you plan to move soon, a shorter term might make sense. If you prefer stability, a longer term may be the right choice.
Refinancing Options: This might be the time to consider refinancing your mortgage. Refinancing can allow you to tap into the equity in your home for things like renovations, consolidating high-interest debt, or other financial needs. It’s important to weigh the pros and cons of refinancing in today’s market.
Switching Lenders: You have the option to switch lenders during your renewal. Recent changes in OSFI guidelines mean you can switch lenders without needing to undergo a stress test, which could provide an opportunity to find a better rate or more favorable terms.
Common Scenarios During Mortgage Renewal
Scenario 1: Increased Monthly Payments Due to Rising Rates Let’s say you secured a 2.5% fixed rate mortgage in 2020, and now your mortgage is coming up for renewal with rates closer to 4.5%. You could see your monthly payments increase by $300 or more. If this increase seems unmanageable, you may need to explore options like extending the amortization period (if possible) to reduce the monthly burden or consider refinancing to consolidate other high-interest debts.
Case Study: Sarah and Mike in Ontario Sarah and Mike were renewing their mortgage in 2024 after securing a low 2.4% rate in 2020. Their new rate was 4.6%, resulting in an increase of $500 per month. After discussing their options with Kingsway Financial, they decided to refinance their mortgage to access some home equity to pay off credit card debt. This helped them manage their monthly payments and reduce their overall debt load.
Scenario 2: Homeowners Looking to Switch Lenders For those considering switching lenders, this can be a smart strategy if you’re able to secure a better rate. With the recent guideline changes, many homeowners are opting to switch to new lenders who offer more competitive terms, and no stress test is required.
Case Study: David and Anita in British Columbia David and Anita had been with their bank for years but were unhappy with their interest rate at renewal time. Their mortgage was set to increase by $400/month. With Kingsway Financial’s help, they explored switching lenders. By securing a new rate of 4.2%, they reduced their monthly payments by $250—giving them more financial flexibility.
Scenario 3: Homeowners Needing a Smaller Payment for the Same Loan Amount In some cases, homeowners are facing significant challenges when it comes to meeting higher monthly payments, especially if rates have increased dramatically. Extending the term length of your mortgage could result in smaller payments each month, but keep in mind that you may end up paying more interest in the long run.
Case Study: Raj and Priya in Alberta Raj and Priya were renewing a mortgage with a 3-year term and noticed a $400 increase in their payments due to rising interest rates. They worked with our team at Kingsway Financial to extend their amortization period by five years, which helped reduce their monthly payment by $300. While this extended the life of their mortgage, it made their payments more manageable in the short term.
What You Should Do Before Your Mortgage Renewal
Review Your Financial Situation: Take a good look at your current financial health, including your income, expenses, and debts. Are you in a position to absorb higher mortgage payments, or do you need to explore options to keep payments lower?
Understand the Market: With interest rates fluctuating, understanding current market conditions is key. At Kingsway Financial, we can help you assess how these changes impact your mortgage renewal.
Consult a Mortgage Expert: Whether you’re considering refinancing, switching lenders, or simply renewing with your current provider, it’s always helpful to get expert advice. We can provide you with a thorough review of your options, helping you make an informed decision.
Why Choose Us for Your Mortgage Renewal?
We specialize in providing expert insights into the mortgage market, and we’re dedicated to making sure your mortgage renewal is a smooth and beneficial process. Here’s how we can help:
Expert Financial Assessment: We’ll assess your current financial situation to help you make the best decision for your renewal.
Access to Best Rates: We work with a wide range of lenders to find the best rate or refinancing solution for you.
Tailored Mortgage Solutions: Whether you’re looking to lower your monthly payment or access home equity, we’ll help you find the right solution for your goals.
Ongoing Support: We don’t just help you at renewal—we’re here for the long term, assisting with your future mortgage needs.
Ready to Renew? Let’s Get Started
The mortgage renewal process doesn’t have to be overwhelming. With the right guidance and planning, you can make informed decisions that align with your financial goals. Click below to schedule a free, no-obligation consultation with one of our mortgage experts today.
Have Questions? We’re here to help. Reach out to us at and one of our team members will be happy to assist you.