Apply For A Mortgage

5 Essential Mortgage Renewal Tips To Get The Best Mortgage Deal

Let’s discuss the 5 essential mortgage renewal tips to get the best mortgage terms and rate. 

Whether you are looking for a straight mortgage renewal or you want to refinance to get some equity out of your current home, you will find this helpful.


Tip #1: Understand The Mortgage Renewal Process

Mortgage renewal is the process of renegotiating the terms of your mortgage after the initial term ends.

The most popular mortgage term in Canada is a 5 year fixed term. Although, variable term mortgages have been very popular in the past decade because we were in an ultra low interest rate environment up until last year. This is an opportunity to re-evaluate your financial goals, finding the best mortgage rates, and explore different options.

Here’s how the mortgage renewal process goes…

  • You get a letter in the mail from your existing mortgage lender. It will typically have 3-5 options on rates and terms for you to choose from.  
  • You check off the box next to the term you want, sign at the bottom and mail it back to the lender. 
  • Done.

At least that’s what the mortgage lenders want you to do.

However, now interest rates are going up and up, so you will be at a huge disadvantage if you simply take the offer that’s given to you. 

So what should you do at renewal before you make any decision?

Tip #2: Review Your Financial Goals

This second tip out of 5 mortgage renewal tips is an important one that most homeowners don’t consider enough. 

Before you make any decisions, take the time to assess your current and future plans, such as home renovations, retirement savings, investments or educational expenses.

Consider how your mortgage renewal can align with these goals.

For example, if you plan to move in the next 2 to 3 years, whether to upgrade to a bigger house or downsize, then it doesn’t make sense to take another 5 year fixed term. 

When you start your mortgage renewal process, be sure to talk about your medium to longer term goals with your mortgage broker. For example, our Effortless Mortgage broker can help you navigate through different scenarios and identify the best options to ensure your mortgage supports your financial goals.

Don’t just focus on the rates.

Tip #3: Start Early

As the interest rates increased significantly over the past year and half, so will your mortgage payments at the time of renewal. Many borrowers see their mortgage payment increasing by almost 50% at the time of renewal.

For example, if you have a $500K mortgage, and renewing into a 5% interest rate from a 2% interest rate 5 years ago, your payment will go up from $2117 to $2908, which is a 37% jump.

We call that a RATE SHOCK.

Mortgage renewal in today’s market becomes a crucial opportunity to look for mortgage options to minimize this shock.

Sometimes mortgage approval can take weeks or even months to complete.

If you leave your renewal decisions to the last minute you won’t have the luxury to fully explore those options.

Tip #4: Shop Around

Mortgage renewal is the only opportunity when you are able to switch to a different lender without any penalties.

Mortgage Renewal is a perfect time to make lenders compete for your business.

One way to help you save time and money is to use a mortgage broker who acts as an intermediary between you and the lending institutions.

They have access to multiple lenders and they often have access to lower rate and volume discount not available to individual borrowers.

For example, even when you are getting a renewal offer from your existing lender, a mortgage broker can still try to get you an even lower rate from the same lender by using their volume discount.

Tip #5: Consider Mortgage Refinance

Mortgage renewal also offers an opportunity to explore mortgage refinancing, which allows you to take out home equity in addition to your existing mortgage balance.

Maybe you need some funds to pay off debt, renovate your basement and maybe keep some cash on hand for a rainy day.

Say you have a $500K mortgage up for renewal and your house is worth $1 Million right now, you can potentially take out $300K (refinancing up to 80% of your home value) by refinancing your mortgage at the time of renewal, without any penalty.

Discuss with your mortgage broker to evaluate whether mortgage refinancing aligns with your financial goals.


Mortgage Renewal Infographic by Effortless Mortgage


As per Yahoo Finance article published in June 2023, “experts say Canadians bracing for higher payments when they renew their mortgages in 2025 and beyond should start planning now in order to best manage the increase”.

The Bottom Line

It’s crucial to understand the mortgage renewal process, review your financial goals, start early, shop around and take advantage of mortgage refinance opportunities. By following these mortgage renewal tips, you’ll be better equipped to get the best mortgage deal during your mortgage renewal. 

If you have any questions, feel free to contact us. 

The Effortless Mortgage has experienced mortgage advisors who get mortgages approved when banks and other lenders decline due to credit, income, etc. We are available 7 days a week!

Book a 15-min call to discuss your needs. No obligation.

Get Your Quote in Minutes

How much is the price of the property?

Which city is the property located in?

The location of your property helps us find the best deal in your local market.

Mortgage Renewal Tips