The Ultimate Guide to Mortgage Renewal in Ontario: How to Get the Best Rate

If you’re an Ontario homeowner, the term “mortgage renewal” likely pops up every few years, often generating a mix of anxiety and confusion. What exactly is it? Is it just signing a new rate, or is it a major financial decision?

The truth is, your mortgage renewal is one of the most powerful opportunities you have to save thousands of dollars and realign your home financing with your current financial goals.

This comprehensive guide will demystify the mortgage renewal process for Ontario residents, explain the critical differences from refinancing, and give you the actionable steps you need to secure the best rate and terms possible.

What Does “Renew Your Mortgage” Actually Mean?

At its core, renewing your mortgage means signing a new contract for the remaining balance of your home loan. It happens because Canadian mortgages are structured in two distinct time frames:

1. Amortization Period: This is the total length of time it will take to pay off your mortgage in full—typically 25 years for new mortgages, but it can be extended.
2. Mortgage Term: This is the length of your current contract, which sets your interest rate, payment schedule, and other terms (like prepayment privileges). Mortgage terms are much shorter than the amortization period, usually ranging from one to five years.

When your current mortgage term expires—a date also known as your maturity date or renewal date—the remaining principal balance is due in full. Since most people don’t have hundreds of thousands of dollars sitting in a bank account, you have four options:

1. Renew the remaining balance with your current lender, taking a new term and rate.
2. Switch lenders, taking your remaining mortgage to a new lender, usually for a better rate or terms.
3. Refinance the mortgage to a new amount or amortization.
4. Pay the remaining principal balance in full.

For the vast majority of homeowners, renewal is the path forward. It is the moment you negotiate a new interest rate and term to continue paying down your existing debt.

Renewal vs. Refinance: Knowing the Difference

The terms “renewal” and “refinance” are often confused, but they are fundamentally different processes with separate requirements and fees. Understanding the distinction is vital for making the right move.

Feature	Mortgage Renewal	Mortgage Refinance
When it Happens	Only at the end of your existing mortgage term.	Can happen at any point during your term (often incurring a prepayment penalty).
The Goal	To secure a new rate and term for the existing loan balance.	To break the existing contract, borrow a larger principal amount, or significantly change the loan structure (e.g., extend amortization).
Home Equity	Generally, no cash is withdrawn.	Used to cash out a portion of your home equity for things like renovations or debt consolidation.
Qualification	If staying with your lender, no re-qualification or stress test is typically required.	Requires full re-qualification, including a credit check, appraisal, and potentially the mortgage stress test.
Fees	Minimal to none, especially if staying with the same lender.	Often includes appraisal fees, legal fees, and potential prepayment penalties.

If you’re simply looking to continue paying down your home with the best possible rate, a mortgage renewal is likely your best choice. If you need to access the equity you’ve built in your home or drastically change your payment structure, you are looking at a mortgage refinance.

The Mortgage Renewal Timeline: Don’t Wait for the Last Minute

The single biggest mistake Ontario homeowners make is waiting for the bank’s letter to arrive before taking action.

By law, federally regulated lenders must send you a renewal statement at least 21 days before your mortgage maturity date. However, by that time, you’ve missed out on your best opportunities.

The 120-Day Advantage

Most lenders allow you to start the renewal process and lock in a rate up to 120 days (four months) before your maturity date without incurring any prepayment penalties.

This four-month window is your power-shopping period.

The Danger of Auto-Renewal

Your lender’s renewal offer will often include a rate that is not their absolute best. If you simply sign the document and send it back, or if you take no action at all, your mortgage may automatically auto-renew at this higher, non-competitive rate.

Never sign the first offer you receive. It’s the starting point for negotiations, not the finish line.

Your Strategy at Renewal: The Power to Choose

This is where you move from being a passive borrower to an active, strategic homeowner. Your renewal is a moment to decide which financial partner best suits your future.

1. Shop Around: You Don’t Owe Loyalty

Your current lender has little incentive to offer you their absolute lowest mortgage rate because they already have your business. The best way to secure a competitive rate is to shop the entire market.

That’s why we’re here. As your dedicated mortgage agent, I can shop around to 50 different lenders for you.

If you’re curious about how a top mortgage professional can simplify this process and ensure you are getting the absolute best deal, I encourage you to check our about us page to learn more about our approach. Once you’re ready to start the negotiation process with power, you can easily book a brief, confidential consultation via our calendly link.

2. Fixed vs. Variable: Which Rate is Right?

Choosing between a fixed or variable rate is the most critical decision at renewal. The right choice depends on your personal risk tolerance and economic predictions.

• Fixed Rate: Offers budget certainty. Your rate is locked in for the entire term, protecting you from future interest rate hikes. This is popular for those who prioritize payment stability.
• Variable Rate: Typically starts lower than a fixed rate, but the interest rate fluctuates with the Bank of Canada’s policy rate. This option carries more risk but offers the potential for greater savings if rates drop.

Given the uncertainty in the current market, it’s essential to understand the pros and cons of each in detail. We have a detailed analysis on this topic: Fixed vs. Variable for Your Mortgage Renewal.

3. Optimize for Cash Flow and Payment Speed

A mortgage renewal is a chance to reset your repayment plan to better suit your budget.

• Adjust Payment Frequency: Switching from monthly payments to accelerated bi-weekly schedule can significantly reduce the interest you pay over the life of the loan.
• Make a Lump-Sum Payment: Most mortgages include prepayment privileges, which allow you to make a large, penalty-free payment toward your principal at renewal. This lowers the outstanding balance and saves you substantial interest.
• Re-Amortize: If you need to lower your monthly payments for better cash flow, we can discuss extending your amortization period. Or, shortening it will help you save a fortune in interest and pay your home off faster.

If your primary goal is to manage or lower your mortgage payment when you renew, we have some effective strategies you can employ today. To see how these changes affect your bottom line, use our free mortgage calculator.

Special Considerations for Ontario Homeowners

While the mortgage landscape is national, the advice you receive should be local. Ontario’s housing market and economic trends are unique, and working with a local professional can ensure you are getting access to regional lenders and products that the big banks may not offer.

For instance, homeowners in areas outside of the GTA, like the anyone renewing their mortgage in North Bay, Ontario, benefit immensely from having an expert who understands the nuances of the regional market and local property values.

Ready to Take Control of Your Renewal?

Don’t let your bank hand you a renewal slip that serves their bottom line—your mortgage renewal should serve yours. Whether you are near the end of your first term or your fifth, a proactive approach can lead to substantial savings.

Book a call with us to start the conversation and see what your options are when you renew. We’ll do the rate shopping for you and help you find the terms that fit your financial situation best.