Your mortgage renews at the end of the term, when you sign a new agreement for the remaining balance. Don't just sign the lender's renewal letter — shop around, start about four months early, and use rate holds of roughly 120 days. Compare offers on our mortgage calculators and track the live rate.
Renewal is signing a new term on your existing balance; refinance changes the loan itself. Don't auto-sign the renewal letter — the posted rate is rarely the best. You can switch lenders at renewal (you may need to requalify). Start about four months early and use a rate hold of roughly 120 days. This is not financial advice.
These two are often confused but do different jobs. A renewal happens when your term ends: you sign a new agreement for whatever balance is left, usually without requalifying if you stay put. A refinance changes the loan itself — borrowing more against your home, extending the amortization, or consolidating debt — and typically requires you to requalify and re-pass the stress test. If you simply want to continue paying down your existing mortgage, that is a renewal; if you want to change the amount or structure, that is a refinance.
| Feature | Renewal | Refinance |
|---|---|---|
| When | End of term | Any time (penalty may apply mid-term) |
| Requalify? | Usually no (same lender) | Yes |
| Change loan amount | No | Yes |
When your term ends, your lender mails a renewal letter with an offered rate. That rate is often not their best — it is priced for people who sign without comparing. Treat the letter as a starting point, not a final answer. Get quotes from other lenders and a mortgage broker, then ask your current lender to match or beat the best offer. Even a small rate improvement compounds over a full term, so a few phone calls can be worth thousands.
Yes. At renewal you are free to move your mortgage to a new lender who offers a better rate or terms. Because your existing term has ended, you generally avoid a break penalty, though the new lender may charge a small transfer or discharge fee. You may need to requalify at the new lender, and depending on the date and lender you may have to pass the stress test there — although as of November 2024 many straight switches (same amount and amortization) no longer require re-passing it. Weigh the switch costs against the savings before you move.
Give yourself room. Start comparing rates about four months before your term ends. Many lenders offer rate holds of around 120 days, letting you lock a rate early while still taking a better one if rates drop before your renewal date. A simple timeline:
Your renewal payment is set by the rate available at renewal, your remaining balance and your amortization. If rates are higher than your last term, your payment can rise noticeably — sometimes called renewal shock; if rates have fallen, your payment can drop. With the overnight rate at 2.25% and the next decision on July 15, 2026, keep an eye on the prime rate, rate history and whether a rate drop may be coming. Model both a higher and a lower rate in our calculators so you are ready either way.
A renewal happens at the end of your term when you sign a new agreement for the remaining balance, usually with no requalification if you stay with your lender. A refinance changes the loan itself, such as borrowing more against your home or changing the amortization, and generally requires you to requalify.
Usually not without shopping first. The rate in a renewal letter is often not the lender's best offer. Comparing other lenders, or asking your current lender to match a competitor, can save you a meaningful amount over the new term.
Yes. At the end of your term you can move your mortgage to a new lender. You may need to requalify and, depending on the lender and the date, pass the stress test at the new lender, though as of Nov 2024 many straight switches no longer require re-passing it.
Start about four months before your term ends. Many lenders offer rate holds of around 120 days, so you can secure a rate early and still take a better one if rates fall before your renewal date.
Your new payment is based on the rate available at renewal and your remaining balance and amortization. If rates are higher than your last term, your payment can rise; if they are lower, it can fall. Running the numbers early helps you prepare for the change.