Hundreds of thousands of Canadian mortgages signed at the record-low rates of 2020–2022 come up for renewal in 2025–2027. If yours is one of them, the decisions you make in the four months before maturity matter more than anything else you’ll do with your mortgage this decade.
What renewal means
Your term (often five years) is the period your rate is locked. Your amortization (often 25 years) is how long it takes to pay off. At the end of each term, the remaining balance is renewed at a new rate for a new term, over the amortization you have left.
How much will my payment change?
Example: a $450,000 balance with 22 years left, renewing from 2.29% to 4.24%. The monthly payment rises from about $2,169 to $2,615, an increase of roughly $446 a month. Try your own numbers in the renewal calculator.
Timeline
- 120 days before: start comparing. Many lenders and brokers can hold a rate for 120 days.
- 21+ days before: federally regulated lenders must send your renewal statement.
- Maturity date: if you do nothing, some lenders auto-renew you, sometimes into a short-term or open product at a higher rate. Don’t let that happen.
Your options
- Renew with your lender: easiest, no stress test. Negotiate: the first offer is rarely the best.
- Switch lenders: no penalty at maturity, and since November 2024 no stress test for a straight switch. The new lender often pays legal and appraisal costs.
- Refinance: borrow more or extend the amortization; you’ll need to re-qualify.
- Pay down principal: at maturity you can prepay any amount without penalty.
Fixed or variable?
A fixed rate gives certainty for the full term. A variable rate moves with the Bank of Canada’s policy rate and carries a smaller penalty (usually three months’ interest) if you need to break it. Your choice depends on your budget’s room for change and how long you expect to stay.