Mortgage Renewal Calculator Canada
Calculate how much your mortgage payments may change when you renew your mortgage, based on today’s available mortgage rates, or a custom rate of your choice.
Is refinancing your mortgage worth it?
Do you need to change the terms of your mortgage or take cash out of your home? Use our refinance calculator to determine if the penalty is worth it.
WATCH: 3 tips for renewing your mortgage in 2024
Frequently Asked Questions
How do you get the best mortgage renewal rate?
To ensure you’ll get the best mortgage renewal rate, start researching and comparing the best mortgage rates from various lenders several months before your current term ends, rather than automatically accepting your existing lender's offer. Improve your credit score by paying bills on time and reducing debt, as a higher score can qualify you for lower rates. Use competing offers to negotiate better terms with your current lender, and consider consulting a mortgage broker for access to more options.
Also read: Early mortgage renewal
Do you have to re-qualify when you renew your mortgage?
If you renew your mortgage with your current lender and have maintained a good payment history, you typically do not need to re-qualify or pass the stress test again. Additionally, lenders are no longer required to apply the mortgage stress test to most borrowers who are switching to a new lender at renewal, provided the mortgage amount and amortization period remain the same. However, even without the stress test, you may still need to re-qualify with the new lender by submitting a new application and meeting their criteria.
How hard is it to re-qualify at renewal?
If you choose to remain with the same lender, are in good standing with them and your financial situation hasn’t materially changed, you usually don’t need to re-qualify. You simply need to fill out the necessary paperwork and submit it in a timely manner.
However, if you decide to switch to a new lender for a better rate or mortgage product, the process has recently become easier. As of November 21, 2024, federally-regulated lenders are no longer required to apply the mortgage stress test to most borrowers who are switching lenders at renewal, provided the mortgage amount and amortization period remain the same. While you will still need to meet the new lender's qualification standards—such as credit score, employment status, and debt-to-income ratio—the removal of the stress test requirement simplifies the process. This change makes it more accessible for borrowers to switch lenders at renewal and potentially secure better mortgage terms.
How many months before can you renew your mortgage?
Most lenders allow you to renew your mortgage without any penalties up to 120 days (or four months) before your term is up.
Is it worth renewing your mortgage early?
Renewing your mortgage early can be beneficial if it allows you to secure a lower interest rate or better terms, potentially saving you money over the life of your loan. Early renewal lets you lock in a favorable rate before potential increases. However, read your mortgage’s terms and conditions before breaking your current mortgage term early and renewing with a new lender; it's important to weigh the penalty fees against the potential savings to determine if early renewal is worthwhile for your specific situation.
Do mortgage payments decrease when you renew?
It depends; if you’ve paid down a significant portion of your mortgage and have an overall smaller principal loan amount, then your regular payment amount will also decrease upon renewal, should all other factors, such as your mortgage rate, stay the same. If you renew your mortgage at a higher mortgage rate, however, that may offset having a smaller principal balance, and your mortgage payment could increase. By contrast, if you renew at a lower mortgage rate, your payment could decrease as you’re paying less in interest each month. Other factors, such as extending your amortization period at renewal time, can also impact the size of your mortgage payment.
Also read: The state of mortgage renewals in Canada
Find the right calculators for all your mortgage and homebuying needs
Guide to Mortgage Renewals
Jamie David, Sr. Director of Marketing and Mortgages
Is your mortgage term coming to an end? You're not alone—over a million homeowners will be renewing their mortgages in 2025, many facing higher interest rates than when they first signed up. With your mortgage payment most likely being the largest expense in your monthly budget, you want to be sure that you are getting the best rate and mortgage product available. Read on to learn more about how to calculate mortgage payments for renewal, how the mortgage renewal process works, and for tips on how to achieve the best outcome when it’s time to renew.
Why use a mortgage renewal calculator?
A mortgage renewal calculator helps you navigate the renewal process with confidence and clarity. Here's why you should consider using one:
- Estimate new payments: By inputting different interest rates, mortgage amounts, and amortization periods, you can see how your monthly payments might change upon renewal. This helps you prepare your budget accordingly.
- Compare offers: The mortgage calculator for renewal allows you to compare potential rates from various lenders side by side. This makes it easier to identify which offer provides the best value over the long term.
By experimenting with different scenarios, you can see how negotiating a lower interest rate or adjusting your amortization period could save you money over the life of your mortgage. Equipped with detailed calculations, you can confidently negotiate with your current lender or decide if switching to a new lender is financially beneficial.
How to use our mortgage renewal calculator
Ratehub.ca’s mortgage renewal calculator makes it easy for you to figure out your projected monthly mortgage payments and generate amortization schedules for multiple scenarios. To get started, you’ll need to enter the following information:
- Mortgage amount: Enter the total amount of your mortgage loan (without deducting any equity you may have accrued over time).
-
- Location: Enter the location of your home.
- Original down payment: Select whether your down payment was more or less than 20%.
- Amortization: You can choose up to four different amortization lengths to generate multiple amortization schedules.
- Mortgage rate: Choose from a range of rates offered by different lenders to see how they impact your monthly payments and overall costs.
- Payment frequency: You can select up to four different payment frequency scenarios, which allows you to generate multiple amortization schedules.
How to read your results
After entering the above information, you can choose your desired amortization scenario. The mortgage calculator will then generate the amortization schedule; you’ll see an orange line going from the top left-hand corner to the bottom right-hand corner, which represents the balance remaining on your mortgage loan. It starts off with the amount of your balance today and finishes when the amount is $0.
You’ll also see a green portion, which represents how much of your payments are going towards the principal mortgage amount. Over the course of the amortization period, the green portion will grow as the percentage of your payments that are going towards paying off the principal increases and the percentage you are paying towards the interest reduces. The blue portion of the bars represents the amount of your payment going toward interest. This portion decreases over time as the balance of your mortgage reduces, resulting in less interest accrued.
In addition to the amortization schedule, the calculator will also display a table that illustrates the amount paid towards principal and interest as well as the total balance at the end of your mortgage term. This will be clearly differentiated from the remaining amortization table, which illustrates your monthly payments towards principal and interest based on the scenario you have entered into the mortgage renewal calculator.
Compare today’s lowest mortgage rates
Saving on your home purchase starts with the lowest rates. Let Ratehub.ca help you compare the best Canadian lenders.
How to renew your mortgage
The simplest way to renew your mortgage is to sign the renewal form sent to you by your current lender in the last 30 days before the end of your mortgage term. But did you know that you don't have to renew with your current lender? You can usually get a lower rate by switching at renewal. In fact, walking into your current bank and re-signing at renewal often means leaving money on the table. Your existing lender has less incentive to provide you with the most competitive rates since they already have your mortgage business. Many lenders may also offer a cash bonus for clients switching at renewal time.
You may also want to think about whether you want the same type of mortgage that you had before, e.g. fixed or variable, short-term or long-term, etc. In today’s elevated interest rate environment, navigating your mortgage renewal wisely is more important than ever. Take a moment to watch the helpful video below, then read on for tips to secure the best mortgage renewal rate. A little effort now could save you thousands of dollars over the life of your mortgage.
Tips for renewing your mortgage
There are a number of steps that you can take to help ensure that when you renew your mortgage, you are getting the most favourable rate and terms possible. Here are some of the most important to keep in mind:
- Get started as soon as you can: Don’t wait for your lender’s renewal document, which typically arrives in the final 30 days of your term. Begin planning at least 120 days before your renewal date. This gives you ample time to evaluate your options, negotiate a better rate, and decide if you want to stay with your current lender or explore alternatives. Starting early also allows you to gather the necessary documentation if you choose to switch lenders and ensures your broker has enough time to process your application. Being proactive can save you money and stress.
- Carefully consider your financial and life goals: Your financial and life goals may have changed since you first took out your mortgage. Whether it’s a career change, planning for a child’s education, or preparing for a move, considering your goals and life events on the horizon helps you find the right mortgage product with the features that you need. For example, if you think you will have to move before your mortgage term is up, you’ll want to make sure you’ll be able to port your mortgage. Also, if you anticipate receiving a sum of money, such as inheritance, in the future and intend to pay off your mortgage, exploring open mortgage options may be a good idea at renewal time.
- Make a list of your mortgage needs: Make a checklist of the features and terms that matter most to you in a mortgage. These features can include portability or the ability to make lump sum pre-payments without incurring penalties. Having clear priorities will make it easier to compare offers and select a mortgage that aligns with your financial strategy.
- Use a mortgage broker: Save yourself the time and effort of going from lender to lender to try to get the best rate. A mortgage broker can serve as your one-stop shop, and is able to provide you with information on numerous lenders, as well as expert, personalized advice at no cost to help you make the right decision. A mortgage broker can also help you obtain a rate hold, which allows you to lock in a mortgage rate for up to 120 days, giving you time to continue your search with the peace of mind that you’ve secured a good rate. If a lower rate is available at the time you’re ready to sign, you will be offered that lower rate.
- Don’t be afraid to ask for a better rate: Your current mortgage lender will likely make it very easy for you to renew, and may be banking on the fact that you’ll just sign your agreement letter without considering your options for the sake of convenience. Rarely is the renewal rate that your current lender offers you the best rate available, and in Canada’s highly competitive mortgage market, there are typically lower rates available from other lenders. In today’s rising rate environment, negotiating for the best rate possible is more important than ever.
- Finalize your renewal: Once you’ve evaluated your options, secured the necessary documentation, and decided on a lender, aim to finalize your renewal well before your term ends. If you’re staying with your current lender, this may involve simply signing the renewal agreement. Bear in mind that, should you choose to switch lenders, you’ll want to have gathered all the necessary documentation to submit a new mortgage application (e.g. copy of renewal letter, proof of income, proof you own the property and proof of property insurance). If you are switching lenders, you’ll want to do this as early as possible, as it’s best to give several weeks for your application to be processed. Otherwise, you could end up being stuck with renewing with your current lender with a rate or terms that are less preferable.
Renewing vs. refinancing
A mortgage renewal is quite straightforward, and just what it sounds like – if you have not paid off the balance of your mortgage before the end of your mortgage term, you will need to renew it. As mentioned above, you can do this by simply signing the renewal form sent to you by your current lender in the last 30 days of your mortgage term, or you can shop around and renew with a new provider at conditions that are better suited to your needs. This is an ideal time to reassess your mortgage type, such as choosing between a fixed or variable rate, or adjusting the term length.
Refinancing, on the other hand, is quite different. If you refinance your mortgage, you are actually breaking your current mortgage contract. Reasons to refinance may include the desire to obtain a better mortgage rate, to access the equity in your home, or to consolidate debt, for example. While you can choose to refinance your mortgage at any time, be aware that it often comes with substantial penalties. It may be financially prudent to wait until the end of your mortgage term to minimize these penalties. However, this timing doesn't eliminate the distinction between renewing and refinancing; they remain two separate actions with different implications.
For further information, check out these helpful pages:
- Best Mortgage Rates in Canada
- Mortgage Default Insurance (CMHC Insurance)
- Open vs. Closed Mortgage: What's the Difference?
- Mortgage Terms Glossary