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What is a mortgage renewal?

About 6 months before your mortgage term ends, you’ll receive a new offer from your mortgage lender to renew. Before signing, it’s important to understand how competitive that offer is and to assess if your mortgage needs have changed.

What is a mortgage renewal?

When your current mortgage term comes to an end, your contract is renewed for another term with the same lender or a different one. This is a great opportunity to review your mortgage needs and look at different options that might work better for your current financial situation and goals. 

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When you work with Perch, we’ll get you the lowest rate available on renewal so you can save on your mortgage.

How to renew your mortgage


Compare your renewal offer using our mortgage search engine


Sign up to Perch and add your property details


Select your mortgage to start your renewal or chat with a mortgage advisor.

Know when your term ends. Your lender will send you a renewal offer before your term ends but it’s best to start considering your options a few months earlier.
Explore your options and assess your current financial needs/goals. You can reach out to your mortgage advisor for help if you have questions.
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Ricky <i></i> <span>Toronto, ON</span>
Ricky Toronto, ON
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I would highly recommend Perch as the service of choice when it comes to dealing with your most important financial decisions. From day one, I didn't make a call or send an email that wasn't returned within minutes to an hour. 10/10 all around!

Free up cash and consider refinancing

When you refinance, you'll unlock a lower cost of borrowing. This enables you to:

  • Take advantage of equity to buy another property or start renovations
  • Free up cash flow to invest or for day-to-day expenses
  • Consolidate your debts so you can focus on one payment 

Consider refinancing and access equity

  • Take advantage of equity to buy another property or start renovations
  • Free up cash flow to invest or for day-to-day expenses
  • Consolidate your debts so you can focus on one payment 

Mortgage renewal FAQs

When your mortgage is up for renewal, you’ll have the chance to negotiate the terms of your mortgage such as the length of your mortgage term and your rate. You might be able to get a lower interest rate if rates have dropped since you first took out your mortgage. This can help you save on your monthly mortgage payments and reduce the overall amount of interest you have to pay over the life of your mortgage.
You will need to renew your mortgage at the end of each term if you still have a balance remaining. This will likely require multiple terms to repay your mortgage in full. How often your mortgage is renewed will depend on the term you choose which can range from a few months to five years or longer.
Many homeowners believe that it’s best to renew with the same bank or lender that provided their initial mortgage but this is not always true. You should take the time to shop and compare different rates to find better deals. If you are able to find a better offer, those savings can help you pay down your mortgage sooner.
If you decide to renew your mortgage with the same lender, you should renegotiate your interest rate, especially if interest rates have gone down. Be sure to ask if there are any fees and charges if you renegotiate and how they calculate these fees. If you have found a better rate somewhere else, you might be able to get your current lender to match that offer. Be sure to have documentation as evidence if you choose to go that route. When you work with a Perch mortgage advisor, we’ll do all of the negotiating for you and will ensure you get the best rate possible.

If you decide to switch lenders, you will have to submit a new mortgage application. You should keep in mind the cost of switching and what approval criteria your new lender might use. Costs to switch can include a home appraisal, legal fees, administration fees and more. Sometimes your new lender might help with these fees since you are switching to them so it’s a good idea to get your mortgage advisor to ask.

Most people who stick with the same lender do so out of convenience, as you will not have to requalify and the renewal process is faster compared to if you were to switch lenders. However, if you work with a mortgage broker, they can help you negotiate with your current lender or find and negotiate with a different lender. You’ll still get the convenience and possibly a better rate.

Another reason why you might choose to stay with the same lender is if your financial situation has gotten worse. Renewing with your existing lender might be the best option since you will not have to pass the federal mortgage stress test, but you might get stuck with a higher rate. You don’t want to risk not getting approved on a loan with a different lender or fail the mortgage stress test.

If you have missed payments or have somehow not complied with your mortgage contract, your lender may choose not to renew your mortgage. They are legally required to tell you in advance of your current mortgage term ending, which should give you time to find another lender. 

If you have a low credit score, it may be beneficial to work with a mortgage broker as they can find a lender that is more willing to accept clients with a weaker credit history. It’s important to note that you will most likely get a higher interest rate when going with a more flexible lender.

The process of switching lenders can take a minimum of 4 weeks. However, most of that time is waiting for applications and legal work to be done. When you work with Perch, we’ll make sure your renewal process is as fast and easy as possible.

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