Mortgage Renewal Calculator Canada 2025

Mortgage Renewal in Canada — What You Need to Know

When your mortgage term ends in Canada, you enter the renewal process. This is one of the most important financial decisions you will make repeatedly throughout your homeownership journey — and one many Canadians handle passively by simply accepting whatever their bank offers.

According to industry data, roughly 60% of Canadians simply sign the renewal slip sent by their lender without shopping around. This is almost always a costly mistake. Lenders typically offer their posted rates — not their best rates — on renewal notices sent out weeks or months before your renewal date.

When to Start Shopping for Renewal

You should begin exploring your renewal options 4-6 months before your current term expires. Here is why:

• 120-day rate holds: Most lenders offer rate holds of up to 120 days, meaning you can lock in today's rate even if your renewal is four months away.
• Negotiation time: Starting early gives you leverage — you can get competing offers and bring them back to your current lender.
• No penalty period: Renewing at the end of your term (not breaking mid-term) means no prepayment penalties.

Fixed vs. Variable at Renewal

Option	2025 Rate Range	Best For	Risk
1-Year Fixed	4.49%–5.20%	Expecting rates to drop	Renewal risk in 12 months
2-Year Fixed	4.39%–4.99%	Short-term certainty	Low-medium
3-Year Fixed	4.29%–4.89%	Balance of term/rate	Medium
5-Year Fixed	4.19%–4.79%	Rate certainty seekers	Low
Variable Rate	Prime - 0.5% to +0.5%	Flexible buyers	Payment fluctuation

Should You Switch Lenders at Renewal?

Switching lenders at renewal requires passing the mortgage stress test again (qualifying at your new rate + 2% or 5.25%, whichever is higher). However, this is often worth it if you can secure a significantly lower rate.

A difference of even 0.25% on a $400,000 mortgage saves roughly $1,000 per year — or $5,000 over a 5-year term. A 0.50% difference saves about $2,000 per year.

Renewal Negotiation Tips

• Get competing offers from at least 2-3 lenders or a mortgage broker before contacting your existing lender
• Present your best competing offer to your current lender and ask them to match or beat it
• Ask about discretionary pricing — lenders have room below their posted rates
• Consider your full financial picture: if your income has grown significantly, you may qualify for a larger lump-sum prepayment at renewal
• Review your amortization: if you can afford higher payments, shortening your amortization at renewal saves substantial interest

Porting Your Mortgage

If you are selling your home and buying another during your term, you may be able to "port" your existing mortgage to the new property, avoiding break penalties. Not all mortgages are portable, and blending a ported amount with a new top-up requires careful math. A mortgage broker can help evaluate whether porting or breaking and refinancing makes more financial sense.