If your renewal payment is rising, compare the new payment, remaining amortization, total interest, lender-switch costs and household cash flow before accepting a renewal offer.
Four points to remember
- A lower rate does not always mean the best contract; compare payment, term cost and flexibility.
- Start reviewing options months before maturity, not after automatic renewal.
- Extending amortization can reduce the payment but may materially increase lifetime interest.
- Act before a missed payment; a lender or broker has more options while the file is current.
Measure the payment shock
Record the balance, maturity date, current payment and remaining amortization. Then compare the offered rate with realistic alternatives using the same balance and amortization so the payment difference is not disguised by a longer repayment schedule.
- New monthly payment
- Five-year interest estimate
- Balance remaining after the next term
Review four ways to respond
Possible responses include negotiating with the existing lender, switching on a straight basis, refinancing to change the balance or amortization, or adjusting the household plan. Each path has different approval, fees and long-term costs.
- Negotiate the renewal rate and features
- Compare a qualifying straight switch
- Model refinance costs and break-even
Use amortization carefully
Re-extending amortization can lower the scheduled payment, but it slows principal repayment. Compare both the immediate cash-flow relief and the extra interest over the time you expect to keep the mortgage.
- Do not compare payment alone
- Preserve prepayment flexibility
- Set a plan to shorten amortization later
Prepare before pressure becomes arrears
If the new payment is not workable, build a complete budget and contact the lender or broker before the first missed payment. Include property taxes, condo fees, insurance and other debts so the solution addresses the entire cash flow.
- Stop adding high-cost debt
- Collect income and mortgage documents
- Identify a realistic payment ceiling
Frequently asked questions
How early should I start a mortgage renewal review?
Several months before maturity is sensible, especially if you may switch lenders, need an appraisal or must change the mortgage structure.
Can I extend my amortization at renewal?
It may be possible through a refinance or lender-specific arrangement, but approval, insurance implications and total interest must be reviewed.
What if I cannot afford the offered payment?
Contact the lender and a licensed mortgage professional before missing payments. Options depend on income, equity, credit, mortgage terms and the reason for the shortfall.
Official sources and verification
This guide prioritizes primary information from governments, regulators and CMHC. Mortgage policies change; confirm the rules that apply when you apply.
This guide and its calculators are for general education only—not an approval, commitment, or legal, tax or investment advice. Actual rates, fees, underwriting and product terms vary by lender and application.