Mortgage Renewal in Canada:
The Complete 2025 Guide
Updated August 2025 • by DebtSimplify.ca Editorial
Why Mortgage Renewal Matters
For most Canadians, the mortgage is the largest financial commitment they’ll ever take on. Yet many borrowers treat their mortgage renewal as a routine administrative step—signing whatever renewal slip their lender sends without a second thought.
The reality?
Your renewal is a golden opportunity. With the right approach, you can:
Lower your interest rate and save thousands in interest.
Adjust your payments to match your current financial situation.
Pay off your mortgage faster.
Switch to a lender who offers more flexible features.
Avoid common mistakes that cost homeowners tens of thousands over the life of their loan.
This comprehensive renewal guide will walk you through everything you need to know in 2025: timelines, tips, strategies, and insider advice from mortgage experts. Whether you’re renewing your first mortgage or your fifth, this resource will help you make the most of your renewal.
👉 Ready to compare renewal options? Get started with Cannect today.
What Is a Mortgage Renewal?
When you take out a mortgage, you agree to a term—often 1, 3, or 5 years in Canada. At the end of that term, unless you’ve paid off your mortgage in full, you’ll need to renew.
Renewal means signing a new agreement with:
A new interest rate (fixed or variable).
A new term length.
Possibly updated amortization (how long it will take to pay off).
Adjusted payment amounts.
How Renewal Differs From Refinancing
Renewal = stay with your current lender (or switch lenders) with no new money advanced.
Refinance = renegotiate your mortgage before maturity, or take out additional funds (equity).
Both can be smart strategies—but renewal happens automatically at term-end. Refinancing is a proactive move.
Mortgage Renewal in 2025: The Current Landscape
Interest rates have been volatile in the past three years. As of mid-2025:
The Bank of Canada’s overnight rate remains elevated compared to 2020–2021.
Fixed mortgage rates are stabilizing but remain higher than the historic lows of the pandemic.
Variable rates are still attractive for some, but come with risk.
This environment makes your renewal more important than ever. Even a 0.50% difference in rate can equal tens of thousands saved over the life of your mortgage.
👉 Don’t auto-renew. See what you could save today.
When to Start Preparing for Renewal
Most lenders send you a renewal notice 3–6 months before your term ends. That’s your cue to:
Shop around for better rates.
Check your credit—good credit can unlock better terms.
Reassess your finances (income, expenses, goals).
Decide if you want to switch lenders.
Ideal Timeline
6 months out: Review your budget, check credit, set goals.
3 months out: Get rate quotes, talk to brokers.
1 month out: Lock in the best offer and start paperwork.
Renewal Options: Fixed vs Variable
Choosing the right product is crucial.
Fixed Rate Renewal
Lock in your interest rate for a set term.
Predictable payments.
Safer if rates rise.
Typically higher than variable rates.
Variable Rate Renewal
Interest rate fluctuates with prime.
Historically cheaper over time, but riskier.
Payments may vary (or more goes to interest if rates rise).
👉 Unsure which suits you? Talk to experts at Cannect.
Switching Lenders at Renewal
Here’s the good news: switching lenders at renewal doesn’t cost you penalties (unlike breaking your term early).
Benefits of switching:
Access to lower rates.
Better prepayment privileges.
More flexible products.
Better customer service.
Costs of switching:
Possible appraisal, legal, or discharge fees.
Time to provide new documentation.
Most brokers (including Cannect) often cover these fees or roll them in, making switching almost frictionless.
Common Renewal Mistakes
Auto-renewing without shopping around.
Focusing only on the rate, not terms.
Ignoring prepayment privileges.
Not matching renewal to your financial goals.
Failing to negotiate.
👉 Even if you stay with your current lender, negotiate—they’ll rarely offer their lowest rate upfront.
Renewal and Debt Consolidation
If you have other high-interest debt (credit cards, personal loans), renewal is a chance to consolidate.
Roll debt into your mortgage at a lower rate.
Simplify payments.
Save thousands in interest.
This requires switching or refinancing, but the savings are substantial.
Strategies for Successful Renewal
Compare multiple offers (don’t stop at your lender’s first quote).
Work with a broker (brokers access dozens of lenders).
Think long-term (where will you be in 5 years?).
Leverage equity to negotiate.
Don’t be afraid to switch lenders.
Frequently Asked Questions (FAQ)
1. Do I have to renew with my current lender?
No. Renewal is your chance to switch lenders penalty-free.
2. How early can I renew?
Most lenders allow early renewal up to 120–180 days before maturity.
3. Can I refinance at renewal?
Yes—you can consolidate debt, change amortization, or access equity.
4. Should I go fixed or variable in 2025?
Depends on your risk tolerance. Fixed offers peace of mind; variable may save money if rates fall.
5. What if I miss my renewal date?
Your mortgage usually renews automatically—often at a posted rate (higher than negotiated). That’s why acting early is critical.
Case Study: How Smart Renewal Saves
Homeowner A auto-renews at 5.5%.
Homeowner B shops around and secures 4.9%.
On a $500,000 mortgage over 5 years, Homeowner B saves $15,000+ in interest—simply by shopping around.
Final Thoughts
Your mortgage renewal isn’t just paperwork—it’s a financial opportunity. Done right, you’ll save money, pay off debt faster, and align your mortgage with your life goals.
Don’t just sign the slip. Take control. Compare options. Negotiate. And when in doubt, get expert advice.
👉 Start your mortgage renewal with Cannect today.
Take 2 minutes today to secure your financial future.
Click here to explore renewal options with Cannect.
