A mortgage renewal happens when your mortgage term ends and you still have a balance owing. Instead of paying it all off, you sign a new agreement—either with your current lender or a different one—to continue paying down the loan.
How It Works
Most mortgages are not fully repaid by the end of the first term. At renewal, you negotiate a new term length, interest rate, and conditions. You can either stay with your existing lender or shop around for better offers from other institutions.
What You Can Change
- Term length: Choose how many years you want your new agreement to last.
- Interest rate: Negotiate for the best fixed or variable rate available.
- Payment schedule: Adjust how often and how much you pay (monthly, bi-weekly, etc.).
- Prepayment options: Increase payments or make lump sums to pay off faster.
Why It Matters
Renewals give borrowers a chance to reassess their financial situation. Choosing the right rate and terms can save thousands of dollars over time. Not reviewing options carefully could mean overpaying on interest or missing out on better conditions.
Final Thoughts
A mortgage renewal is an opportunity to renegotiate and improve your loan terms. By comparing offers and understanding your options, you can align your mortgage with your current financial goals.