A mortage renewal is the process of ending your current mortgage term for a new one. It occurs at the end or near the end of your current term. Your lender must send you a mortgage renewal statement at least 21 days before the end of your existing term.
With that in mind you should start working with a mortgage broker (like Breezeful) a few months before your term ends to ensure you end up with the best possible rate.
Sent by e-mail or mail, the mortgage renewal statement outlines the same info as your current mortgage term:
Sometimes lenders automatically renew you for a new term at less favourable rates, so it's important to review your renewal statement.
It's also important to note that while it's in the lenders' best interest to renew their customers, they're not legally bound to force you to renew with them for a subsequent term.
However, if you do decide to stay with your current lender you should negotiate whatever rate they tell you or list on your mortgage renewal statement
If your financial circumstances change where you're less likely to qualify for a different lender, it probably makes more sense to keep the same lender and negotiate your terms and rate. When you switch financial institutions you'll likely need to be approved on their mortgage application, and it may have different qualifications than your current lender.
The main reason homeowners switch lenders when renewing their mortgage is because another lender gave them a more favourable rate, offsetting the costs of switching over with the money saved over the lifetime of the mortgage.
Breezeful can help you determine if switching your lender for a mortgage renewal makes sense given the costs above. We have lenders that can waive the need for an appraisal and lenders that cover the cost to transfer, even if it's a collateral charge
While a mortgage renewal is the the same loan but with different terms, a mortgage refinance replaces your existing loan with a new mortgage. Depending on your situation it might be worthwhile to consider refinancing or a home equity line of credit.