If your mortgage renewal date is approaching, it’s important not to leave it until the last minute. While missing your renewal date doesn’t usually mean your mortgage is immediately in default, it can limit your options and may end up costing you more in the long run.
Here’s what Canadian homeowners should know if they miss their mortgage renewal date.
The Short Answer
If you don’t arrange a new mortgage before your current term expires, most Canadian lenders will automatically renew your mortgage. However, the renewal terms may not be the most competitive available, and you could lose the opportunity to shop around for a better rate or mortgage product.
That’s why it’s generally recommended to begin reviewing your renewal options 90 to 120 days before your renewal date.
What Happens When Your Mortgage Term Ends?
At the end of your mortgage term, you still owe the remaining balance on your mortgage. Your lender expects you to either:
- Renew your mortgage with them.
- Switch your mortgage to a different lender.
- Refinance your mortgage.
- Pay off the remaining balance (which is uncommon).
If you don’t make arrangements before the maturity date, many lenders will automatically renew your mortgage under their default renewal process.
The exact terms vary by lender, but automatic renewals often come with shorter terms or interest rates that may not be the most competitive available.
Can You Still Switch Lenders After Your Renewal Date?
Possibly—but it becomes more complicated.
Once your mortgage has automatically renewed, you may already be committed to a new mortgage term. Depending on the lender and the terms you’ve accepted (or that automatically took effect), switching to another lender could trigger prepayment penalties or administrative fees.
This is one of the biggest reasons mortgage brokers recommend starting the renewal process several months before your mortgage matures.
Will My Interest Rate Increase?
It can.
If you haven’t negotiated your renewal ahead of time, your lender may renew your mortgage using a rate that isn’t as competitive as what may be available elsewhere.
Many homeowners are surprised to learn that the first renewal offer from their lender isn’t always their best option. Shopping around before renewal may help you secure a lower interest rate or a mortgage that better suits your financial goals.
Can I Negotiate My Renewal Offer?
Absolutely.
Many borrowers assume they have to accept the first offer from their existing lender, but that’s rarely the case.
Working with a mortgage broker allows you to compare mortgage products and rates from multiple lenders before making a decision. Even if you ultimately stay with your current lender, knowing your options can strengthen your negotiating position.
What If My Financial Situation Has Changed?
A mortgage renewal is also a good opportunity to review your finances.
Since your last mortgage term, you may have:
- Received a salary increase.
- Paid off significant debt.
- Changed jobs.
- Started a family.
- Purchased another property.
- Improved your credit score.
These changes could affect which mortgage products make the most sense for your current situation.
If you’re considering refinancing, consolidating debt, or changing your amortization period, discussing your options before renewal is especially important.
When Should You Start the Renewal Process?
Most lenders begin sending renewal notices approximately 90 to 120 days before your mortgage maturity date.
Rather than waiting for the paperwork to arrive, it’s a good idea to start reviewing your options as soon as you’re eligible. This gives you plenty of time to compare lenders, lock in a rate if appropriate, and complete any required paperwork without feeling rushed.
How a Mortgage Broker Can Help
Renewing your mortgage is more than simply signing the first document your lender sends you.
A mortgage broker can help you:
- Compare rates from multiple lenders.
- Determine whether switching lenders makes financial sense.
- Review fixed and variable rate options.
- Explore refinancing opportunities.
- Ensure your mortgage continues to fit your long-term financial goals.
Best of all, you can often complete the renewal process well before your current mortgage term expires, giving you confidence that everything is in place before your maturity date.
Frequently Asked Questions
What happens if I forget to renew my mortgage?
In many cases, your lender will automatically renew your mortgage when your term ends. However, the renewal terms and interest rate may not be the most competitive available, making it worthwhile to review your options before your renewal date.
Can I renew my mortgage early?
Yes. Many Canadian lenders allow you to begin the renewal process approximately 90 to 120 days before your mortgage maturity date without paying prepayment penalties. This gives you time to compare rates and secure a mortgage that meets your needs.
Is there a penalty for missing my mortgage renewal date?
Missing your renewal date doesn’t automatically result in a penalty, but if your mortgage renews into a new term and you later decide to switch lenders, you may have to pay prepayment penalties or other fees depending on your mortgage contract.
Should I accept my bank’s first renewal offer?
Not necessarily. Many homeowners benefit from comparing mortgage options before renewing. A mortgage broker can help you evaluate offers from multiple lenders to ensure you’re getting a competitive rate and mortgage product.
Renew Your Mortgage with Confidence
If your mortgage is coming up for renewal, don’t wait until the last minute. Starting the process early gives you more time to compare lenders, negotiate better terms, and make informed decisions about your mortgage.
At The Lethbridge Mortgage Centre, we help homeowners throughout Lethbridge and Southern Alberta review their renewal options, compare competitive mortgage rates, and find solutions tailored to their financial goals. Whether you’re happy with your current lender or considering a switch, we’re here to help make your mortgage renewal as smooth and stress-free as possible.
Contact The Lethbridge Mortgage Centre today for a no-obligation mortgage renewal review and let’s make sure your next mortgage term works for you—not just your lender.