Mortgage renewal is the process of extending your mortgage loan once the current term ends. Here’s a clear breakdown of how it works:
🔁 What Is a Mortgage Renewal?
A mortgage is typically divided into terms (e.g., 1 to 5 years), while the amortization period (e.g., 25 years) is the total length of time it will take to fully pay off your mortgage. When your current term ends, unless you’ve paid off the mortgage, you must renew it for another term.
📝 How the Renewal Process Works
Lender Sends a Renewal Offer
Usually 30–120 days before your term ends, your current lender will send a renewal offer.
The offer includes a new interest rate, term length, and possibly other terms like payment frequency.
You Review Your Options
You can accept the offer (often by just signing and returning it).
Or you can shop around for better rates or terms from other lenders.
Negotiate (Optional but Recommended)
Even with your current lender, it’s possible to negotiate a better rate.
Showing competing offers can help in negotiations.
Switching Lenders
If another lender offers better terms, you can switch.
This may involve a new application, credit check, and possibly switching fees (although many lenders will cover those to win your business).
Sign the Renewal Agreement
Once you’ve chosen a lender and a new term, you sign the renewal documents.
Your new term begins, and the process repeats when that term ends—until the mortgage is paid off.
✅ Things to Consider at Renewal
Current interest rates
Financial goals (e.g., paying off faster, lowering payments)
Type of mortgage (fixed vs. variable)
Prepayment options
Penalties for breaking the term early
Would you like a checklist to help prepare for mortgage renewal?