Mortgage Renewal Calculator

How Mortgage Renewal Works in Canada

A Canadian mortgage runs on terms, usually five years, inside an amortization that runs 25 or 30. When the term ends, you renew the remaining balance for a new term at a new rate. You will do this four or five times before the mortgage is paid off.

At renewal you can stay with your lender, or move the mortgage to another one. Staying is easier. Moving usually pays better. Your existing lender knows switching is a hassle, and the first offer reflects that.

Switching at renewal does not trigger a prepayment penalty, because the term has ended. That is the single most useful thing to know about renewal, and it is the thing lenders mention least.

Renewal mortgage payment calculator
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Estimates only. Canadian mortgages are compounded semi-annually. Actual payments may vary by lender.

This calculator provides estimates for general information only. Mandeep Dhesi is a licensed real estate professional, not a licensed mortgage broker or agent. Nothing on this page constitutes mortgage advice or an offer of credit. Rates, penalties and qualification depend on your lender, your credit and your property. Confirm all figures with your lender or a licensed mortgage professional before making a decision.

What Changes Your Payment at Renewal

Rate. The obvious one. On a $500,000 balance, half a percentage point moves the monthly payment by roughly $130.

Amortization remaining. Five years into a 25-year amortization, you are now renewing over 20 years. Shorter amortization means a higher payment even at the same rate.

Balance paid down. Every payment you made during the term reduced the principal, which pulls the payment the other way.

Payment frequency. Accelerated bi-weekly makes the equivalent of one extra monthly payment per year and shortens the amortization without you noticing much.

Renewal or Refinance?

Renewal means signing a new term on the balance you already owe. Refinance means changing the mortgage itself, usually to pull equity out or consolidate debt.

You can do both at the same time. A renewal date is the cheapest moment to refinance, because you are not breaking a term and not paying a penalty.

Mortgage Renewal Questions

Your existing lender is not obligated to renew. If they decline, the balance becomes due at the end of the term and you need to place the mortgage elsewhere.

This is uncommon with a clean payment history. It happens when your income situation changed, your credit dropped, or the property no longer meets the lender’s guidelines. If you are declined, you have the remaining term to arrange financing with another lender, including B lenders and credit unions who price for exactly this situation. Start the moment you get the letter, not the week before the term ends.

Yes. There is no legal requirement for a lender to renew. In practice, a lender who has been paid on time for five years almost always renews, because a performing mortgage is a profitable asset and replacing it costs them money. Denials cluster around missed payments, a material drop in income, or a property that has become difficult to appraise.

For a straight renewal with your existing lender, usually not. You are not applying for new credit and they already hold the mortgage.

Switching lenders is a new application, so the new lender pulls credit, verifies income and often orders an appraisal. This is the real cost of switching. Not money, paperwork.

Renewing signs a new term on your existing balance. Nothing about the loan amount changes and there is no penalty, because the term has ended.

Refinancing changes the mortgage itself. New amount, often a new amortization, and if you do it mid-term, a prepayment penalty. Refinancing lets you access equity or roll other debt into the mortgage. Renewing does not.

Most Canadian lenders let you renew early in the final 120 to 180 days of your term without a penalty. Renewing early inside that window locks a rate against the possibility that rates rise before your maturity date. Outside that window, an early renewal counts as breaking the term and triggers a prepayment charge.

If you do nothing, most lenders roll the mortgage into a new term automatically, often at their posted rate rather than a discounted one. Posted rates run materially above what the same lender will give you if you ask. Automatic renewal is the most expensive way to renew.
Yes. At maturity you can pay the balance in full with no prepayment penalty. This is the only point in the term where that is true without limit.

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