Mortgage Renewals
Mortgage renewals are on the rise again in 2026. Here are some timely insights from a Mortgage Agent we work with that you may find helpful:
What do you do when your mortgage is coming up for renewal?
I would say the first step is to call your existing lender and find out what they are willing to offer you on the renewal. Once you have done this, I believe the second step would be to reach out to a Mortgage Broker/Agent (hopefully myself) to see what they can possibly offer.
In our current environment with rates staying flat or possibly coming down I don’t think people need to rush to renew their mortgage as early as possible. Most lenders will allow you to early renew your mortgage up to 4-6 months before the maturity date. Again, in our current environment with rates expected to stay the same, or come down, I don’t think you need to renew as early as possible and can be patient. If we were in a rate increasing environment, it would be a different story.
What to consider when renewing your mortgage:
1. Do you want to extract any equity in your property for any reason?
This could be to pay off debts, renovate, invest, etc. While you can extract equity from your property in the middle of a mortgage term, I always think it’s best to do so at the maturity date to avoid additional fees, penalties, etc. Even if you don’t need the funds right away, try to think about your future plans, and if you should consider using equity to fund any of those plans. At the very least, you want to try to clear up your debts, especially those credit cards, lines of credit, and even car loans, that could be sitting at a much higher rate than you would have on the mortgage.
2. Do you want, or need access to a home equity line of credit?
I love this consideration as it has meant a lot to my wife and me over the years. While yes, the mortgage rate you get is very important, try to think big picture with this one. I remember years and years ago my wife and I had a mortgage renewing and we were shopping around for rates and products. We ended up taking a mortgage that offered us a home equity line, even though the rate was slightly higher than some of the other offers we got. This home equity line allowed us to turn one property into multiple properties over the years. If you have equity in your property, a home equity line can be a very useful tool to fund other projects/investments. Even if you’re thinking about a possible use for it 1, 2, 3 years down the line, why not have it. With most institutions there is no cost to have it, unless you use it. There are more strategies on this that I can elaborate on if needed. Just call me. Your maturity date is the optimal time to get this if you don’t already have it.
3. Do you want to consider re-amortizing your mortgage?
As we all know, rates have gone up significantly over the past couple of years. Many people that have their mortgage coming up for renewal are likely coming out of a mortgage rate that started with a 1 or a 2 and now are going to have to go into a mortgage that starts with a 3 or a 4. If you just do a straight renewal, you’re likely going to see a significant increase in that monthly mortgage payment. For many families (mine included) this has a huge effect on monthly cashflow. One thing to consider is re-amortizing that mortgage back up to soften that blow. For example, let’s say you are 5 years into a mortgage that started with a 30-year amortization. So, you have 25 years left at maturity. At renewal you can consider putting that amortization back up to 30 years to soften the blow on the monthly mortgage payment caused by the significantly higher interest rates. I know what you’re thinking, 'I don’t want to go backward with my mortgage'. In this example you don’t need to think of it as you take your age, then add 30 years on to it, and that’s when you will pay off your mortgage. With most mortgages, you have the option to make prepayments, so really, you could pay off your mortgage in as little as 5 years if you had the means to do so. The amortization is just setting your minimum monthly payment. I remember this being huge for my wife and I when we were going through two maternity leave years, then having two kids in daycare at the same time, and even now having both kids playing hockey. Having the lowest possible payments in that time was so important. Then when things went back to normal, we could pay much more to the mortgage via prepayments. Just something to consider.
