Our renewal calculator makes it easy to calculate your mortgage payments for your next mortgage term. See how your new renewal mortgage rate will impact your mortgage payment.
A mortgage renewal can present a good opportunity to get a better mortgage interest rate. Some of the key factors to consider at renewal include the interest rate type (fixed vs. variable), the term length, amortization period, as well as other fees and penalties associated with renewing or switching lenders.
When your current mortgage term comes to an end, you have the option to renew your mortgage with your current lender. The other alternative is to refinance with a completely new lender. It is important to understand the difference between the two options to ensure you choose the best option for your financial situation.
The 120-day renewal countdown
Start planning well before your term expires to get the best possible outcome. Here is a timeline of what to do at each milestone:
| Countdown | Action |
|---|---|
| 120 days (4 months) | Receive renewal notice from your lender; begin researching current mortgage rates across lenders |
| 90–120 days | Request rate holds from competing lenders to lock in a potentially lower rate; most rate holds last 90–120 days at no cost |
| 60–90 days | Compare all rate offers; contact a mortgage broker for additional options; negotiate with your current lender by presenting competing offers |
| 30–60 days | Make a final decision on renewing or switching; if switching, submit a full application to the new lender; arrange appraisal if required |
| 15–30 days | Sign renewal or transfer documents; ensure legal paperwork is in order for a lender switch |
| Renewal date | New term begins; first payment under new rate and terms |
Starting early gives you the leverage you need to negotiate the best rate and avoid defaulting to your lender’s posted rate.
Mortgage renewal calculator
This mortgage renewal calculator takes the following inputs to help you calculate your updated mortgage payments:
- Current Mortgage Balance: The principal on the loan that needs to be paid back at the end of your current term
- New Mortgage Rate: The updated rate that you will have for your next mortgage term
- Amortization Period: The remaining length of time on your mortgage
You will then be provided with a breakdown showing the new estimated payment amount, the principal and interest to be paid over the new term, and the remaining amortization. An amortization schedule will also help you understand how the interest and principal portion of each payment will change over the term.
Ontario renewal calculator
This mortgage renewal calculator can help you see the impact of your mortgage payment in Ontario. See how your mortgage payments will change with total interest paid as well as an amortization schedule.
Mortgage renewal vs. refinance
A mortgage renewal and a mortgage refinance are two distinct options available when your mortgage term ends. Understanding the differences can save you thousands of dollars.
| Factor | Renewal (Same Lender) | Refinance (New Lender) |
|---|---|---|
| Stress test required? | No | Yes |
| Appraisal needed? | No | Usually yes ($300–$500) |
| Legal fees? | No | Yes ($800–$1,500+) |
| Can change mortgage amount? | No | Yes (up to 80% LTV) |
| Can access equity? | No | Yes |
| Can consolidate debt? | No | Yes |
| Penalty to switch? | None (at term end) | None (at term end) |
| Rate shopping leverage | Moderate | High |
| Typical timeline | A few days | 2–4 weeks |
A renewal means staying with your current lender and agreeing to a new term, usually with an updated interest rate. The process is straightforward, and you typically do not need to re-qualify through the mortgage stress test. A refinance involves switching to a new lender, which may offer a better rate but requires passing the stress test, a new appraisal, and paying legal and administrative fees. Refinancing also allows you to change your mortgage amount, access equity, or consolidate debt, which a simple renewal does not.
If you only need a new rate with minimal hassle, renewal is the easier path. If you want to restructure your mortgage or take advantage of significantly better terms elsewhere, refinancing may be worth the extra effort and cost.
Should you go fixed or variable at renewal?
This is one of the most important decisions at renewal time. Each option has distinct advantages:
Fixed rate
- Predictable payments for the entire term — ideal if you value budgeting certainty
- Protection from rate increases — if rates rise, your payment stays the same
- Higher starting rate — fixed rates are typically higher than variable rates at the time of signing
- Higher penalty to break — the IRD penalty on a fixed mortgage can be much larger than a variable-rate penalty (use our mortgage penalty calculator to compare)
Variable rate
- Lower starting rate — variable rates often start lower than fixed rates, providing initial savings
- Benefit from rate decreases — if the Bank of Canada lowers rates, your rate drops too
- Lower penalty to break — typically only three months’ interest, making it easier to switch or sell mid-term
- Payment uncertainty — your payment can increase if the prime rate rises
Historically, variable rates have been cheaper than fixed rates over the long term more often than not. However, past performance does not guarantee future results. Consider your risk tolerance, financial stability, and how long you plan to stay in your home when deciding.
What happens if you don’t actively renew
If your mortgage term expires and you have not signed a renewal agreement, most lenders will automatically renew you into a new term — often at their posted rate, which is significantly higher than negotiated rates. For example, if the lender’s posted 5-year fixed rate is 6.50% but negotiated rates are 4.50%, passively renewing could cost you thousands of dollars in extra interest each year.
Example: On a $300,000 balance, the difference between 6.50% and 4.50% is approximately $4,800 per year in additional interest. Over a 5-year term, that is roughly $24,000 in unnecessary cost.
This is why it is critical to actively engage in the renewal process well before your term ends. Even a simple phone call to negotiate with your current lender can save you a significant amount of money.
Tips for your mortgage renewal
Start planning for your mortgage renewal at least 120 days before your current term expires. Many lenders allow you to lock in a rate 90 to 120 days in advance, protecting you from potential rate increases. Do not simply sign and return your lender’s renewal offer without comparing it to rates from other lenders. Use this as an opportunity to negotiate — presenting a lower rate from a competitor often encourages your current lender to match or beat it.
Consider whether a fixed or variable rate suits your risk tolerance and financial plans for the upcoming term. Review your amortization period and decide whether shortening it could save you interest over the long run. If you have built up significant equity, explore whether accessing it through a refinance makes sense for debt consolidation or other goals. Use our mortgage calculator to run different scenarios before making a decision.
Renewal negotiation tips
- Get competing quotes — Even if you plan to stay, having competing offers gives you leverage
- Talk to a mortgage broker — Brokers have access to multiple lenders and can often find better rates
- Ask about loyalty discounts — Some lenders offer retention rates for long-standing customers
- Consider the total cost — A slightly higher rate with better prepayment privileges may be worth more than the lowest rate with restrictive terms
- Don’t forget about portability — If you might move during the next term, ensure your mortgage is portable to avoid penalties
Related calculators
- Mortgage Calculator — Calculate payments at your new renewal rate
- Mortgage Rates — Compare current Canadian mortgage rates
- Mortgage Refinance Calculator — See if switching lenders is worth it
- Mortgage Stress Test Calculator — Check if you qualify when switching lenders
- Mortgage Penalty Calculator — Estimate penalties if breaking your term early
- Mortgage Amortization Calculator — View your full amortization schedule
- Mortgage Affordability Calculator — Reassess what you can afford