Mortgage Renewal in Ottawa: What to Do Before Your Term Ends
When your mortgage term ends, you can renew with your current lender, switch to a new lender, or pay off the balance. Lenders often mail a renewal offer 30 to 60 days before maturity, and the first offer is not always the best one. Taking the time to compare can save thousands over your next term.
Your renewal options
| Option | What it means |
|---|---|
| Renew with your lender | Sign a new term with your current lender, often with little paperwork. |
| Switch lenders at maturity | Move to a new lender for a better rate. Many lenders cover legal and appraisal costs on a straight switch. |
| Renew and change your mortgage | Adjust your amortization, add a co-borrower or borrow more, which may involve qualification. |
| Pay off the mortgage | Use savings or the proceeds from a sale. |
Do I need to pass the stress test to switch lenders?
For a straight switch at renewal, where the balance and amortization stay the same, uninsured mortgages generally do not have to pass a new stress test with federally regulated lenders. Provincially regulated lenders and some situations can still require it, so ask any lender you are considering.
Renewal checklist
- Find your maturity date and current balance on your mortgage statement.
- Ask your lender what rate they would offer today, and whether they will match a competing offer.
- Get a second quote from a broker or another lender.
- Compare rate, term, prepayment options and penalty rules, not only the interest rate.
- Decide on fixed or variable and the length of your term.
- Read the contract before you sign. Renewal documents sometimes change terms.
Mistakes to avoid
- Signing your lender’s renewal letter without shopping around.
- Choosing a term only because it has the lowest rate, without thinking about your plans.
- Ignoring changes in your life, such as a move, new baby or job change, that may affect the best term.
- Waiting until the last week, when you have less leverage and less time.
Frequently asked questions
Do I have to renew with my current lender?
No. You can switch to another lender at maturity. Many lenders cover switching costs for eligible files, so ask each one what they cover.
Can I negotiate my renewal rate?
Yes. Ask for the best available rate, and share competing quotes. Lenders often improve their offer when they know you are comparing.
What happens if I do nothing at renewal?
Many lenders will automatically renew you for a similar term at their current rate, which may not be competitive. Check your contract and act before the maturity date.
Can I break my mortgage before renewal?
Yes, but you will usually pay a prepayment penalty. Ask for the exact figure in writing before deciding.
How long should my renewal term be?
It depends on your plans and comfort with change. Shorter terms give flexibility while longer terms give payment certainty. A broker can help you weigh the trade-offs.
Compare renewal offers for your Ottawa mortgage
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