For many Canadian homeowners, mortgage renewal may feel like a routine step that happens every few years. But the renewals happening over the next 12–24 months are anything but routine.
Canada is expected to see one of the largest mortgage renewal waves in decades, with approximately 1.15 million mortgages renewing this year alone, according to Canada Mortgage and Housing Corporation. A large portion of these mortgages were originally arranged when interest rates were significantly lower than they are today.
Because of that shift, many homeowners are starting to ask the same question: What will my payments look like when my mortgage renews?
While the answer will vary depending on each situation, one thing is clear — the earlier you start planning, the more options you’re likely to have.
Your renewal date is an opportunity
Mortgage renewal is one of the few times during your mortgage term when you can make changes without paying a penalty. That makes it an ideal moment to step back and review whether your mortgage still fits your financial situation and future plans.
Many lenders send renewal offers several months before the maturity date, sometimes as early as six months in advance. Rather than waiting until the last minute, that window can give you valuable time to explore your options.
Starting early allows you to:
- review different lenders and mortgage products
- understand how current rates may affect your payments
- adjust your mortgage structure if needed
Even if you decide to stay with your current lender, having time to review your choices can make the process far less stressful.
Preparing for potential payment increases
One of the biggest concerns homeowners have right now is the possibility of higher monthly payments at renewal.
This increase, often referred to as payment shock, happens when a mortgage that was secured during a lower-rate environment renews at today’s higher rates.
Before making any decisions, it’s important to understand what the numbers might look like. Seeing how your potential payment compares to your current one can help you determine whether adjustments are needed.
If a higher payment feels challenging, there may be strategies that help ease the transition.
For example, extending your amortization could lower the required monthly payment by spreading the balance over a longer period. While that approach may increase interest costs over time, it can create more manageable cash flow in the short term.
Homeowners with sufficient equity may also want to consider refinancing at renewal. Depending on the situation, refinancing can sometimes help consolidate higher-interest debt, improve monthly cash flow, or restructure the mortgage to better match current financial priorities.
Looking beyond the interest rate
Interest rates understandably get most of the attention during renewal discussions, but they are only one piece of the puzzle.
Mortgage features can have a meaningful impact on your financial flexibility over the life of the term. Elements such as prepayment privileges, penalty structures, and portability can all play a role depending on your future plans.
In some cases, choosing a mortgage with slightly more flexibility may provide greater long-term value than focusing solely on the lowest rate available.
A chance to realign your mortgage with your goals
Renewal can also be a useful checkpoint in your overall financial plan.
Your circumstances may have changed since your last mortgage was arranged. Income, family needs, investment goals, or plans to move in the coming years can all influence what type of mortgage structure makes the most sense.
Taking time to review your mortgage at renewal helps ensure it continues to support those goals rather than simply rolling forward unchanged.
Don’t let your mortgage renew automatically
One of the most common mistakes homeowners make is allowing their mortgage to automatically renew with their current lender without reviewing alternatives.
While automatic renewal may feel convenient, it can sometimes mean missing opportunities to improve your mortgage terms or adjust your structure to better suit your needs.
A simple review ahead of your renewal date can provide clarity, uncover potential savings, and help you move forward with a plan that feels right for you.
If your mortgage renewal is approaching, taking the time to explore your options now can make the process smoother and far less stressful.