Frequently Asked Questions

Your mortgage renewal can be influenced by changes in your financial situation since you initially secured your mortgage. Events such as missed credit payments, a decrease in income, or a lower credit score could potentially affect your mortgage renewal.

According to the Bank of Canada, approximately 80% of mortgages active as of March 2022 will be up for renewal in 2024, totaling $251 billion. This figure is expected to encompass nearly all mortgages by 2026.

There is a possibility of mortgage rates decreasing in 2024. The Bank of Canada has hinted at halting its benchmark overnight lending rate increases due to improved inflation rates in 2022. Analysts anticipate the central bank may start reducing its interest rate throughout 2025, potentially leading to lower variable mortgage rates. Additionally, fixed mortgage rates have already begun to show slight discounts due to lower bond yields, reflecting investor optimism about the central bank’s rate hike cessation.

Although rare, a mortgage renewal from your existing lender can be denied if there has been a significant deterioration in your financial situation. In such cases, exploring alternative lenders or different term options may be necessary. 

At the time of mortgage renewal, it’s essential to reflect on any significant life events, such as job loss or significant purchases, which might impact your borrower profile. Additionally, exploring alternative product options, like adjusting amortization periods or switching between fixed and variable-rate terms, can be beneficial.

A mortgage renewal involves obtaining a new term for your existing mortgage without changing the loan amount or terms, either with the current or a new lender. Refinancing, on the other hand, entails replacing your current mortgage with a new one, potentially altering the loan amount and terms, and possibly incurring penalties for breaking the existing mortgage.

A mortgage renewal refers to renegotiating an existing mortgage agreement upon the expiration of the original term. This process occurs until the mortgage amortization is complete, offering borrowers the opportunity to assess and adjust their mortgage features if needed.

The decision between a 3 or 5-year mortgage renewal depends on your preferences and circumstances. While 5-year terms often provide competitive rates, shorter terms offer greater flexibility at slightly higher rates.

Renewing your mortgage is necessary as long as there is an outstanding mortgage balance. However, you have the option to switch lenders or modify term lengths, rates, and types during the renewal process.

While I recommend starting the mortgage renewal process at least 120 days in advance, it’s essential for clients to take proactive steps to protect themselves from any unexpected changes in interest rates. By initiating the renewal process early, clients can ensure they have ample time to explore their options and make an informed decision. Additionally, I advise clients to secure a rate hold immediately by contacting their lender or mortgage agent. This rate hold will safeguard them against any unforeseen rises in interest rates, providing peace of mind throughout the renewal process.

When it comes to making a decision on your mortgage renewal, it’s important to assess your options well in advance of the renewal date. If you find yourself needing more time to research or seek advice, consider asking your lender to renew you into an open mortgage. This provides you with the flexibility to continue your research without feeling rushed. Alternatively, working with a Mortgage Agent like myself can provide valuable guidance and assistance throughout the renewal process. By taking proactive steps and exploring all available avenues, you can ensure that you make an informed decision that aligns with your financial goals and circumstances.

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