Mortgage Renewal Options

Tracy Head • September 9, 2023

Right now I am fielding a high number of calls from people looking for information about renewal options.


In 2016 when the Stress Test was introduced I remember questioning the wisdom of the new qualification guidelines. I also remember qualifying clients based on a rate of 4.64 per cent when their mortgage rate was only 2.24 per cent (that was the Bank of Canada Benchmark rate at the time) and feeling a bit frustrated that their borrowing power had been reduced.


Clients had to look for ways to strengthen their applications. Over the last few years with prices and rates increasing this has meant clients have been leaning on family for help with their down payment or adding them to their applications as co-signors.

By 2018 the Bank of Canda Benchmark rate we were using to qualify clients had risen to 5.25%. Fast forward to 2023 and those mortgages are now coming up for renewal and clients are looking at renewal rates around 6 per cent.


In theory the Stress Test was bang on and clients were qualified to actually make the payments based on the renewal rates they are facing today (plus or minus a half per cent). In theory clients should be able to carry their new higher payments based on today’s interest rates. In theory clients’ income would have risen over the last five years. Reality looks a bit different.


The cost of living has skyrocketed. I’m sure we all feel it every time we see our bill at the grocery store or the fuel pump.

I don’t have official statistics but am seeing many clients carrying more consumer debt when I review their updated applications. It is not unusual to see people trying to manage a credit line, multiple credit cards, and even one or two vehicle payments. What this increased consumer debt means for a few clients that I’ve worked with is that they either need to stay with their current lender and accept the renewal rate offered, or they need to consolidate their consumer debt into their mortgage in order to afford to stay in their homes.


The significant increase in house prices over the last five years means that refinancing at renewal is an option. Sometimes, arguably many times, this is the right decision in order for clients to reset their finances. Sometimes harder decisions need to be made.

Is this the right decision long term? One of the other options is selling their homes to get out from under the consumer debt but the challenge with this decision is that suitable rentals are hard to come by and in many cases the monthly rent payment is higher than what a mortgage payment would be.


The sticker shock of renewal rates and payments has been sobering this fall. If you have a mortgage coming up for renewal over the next few months I encourage you to connect with your lender or mortgage person at least four months ahead of time to look at what your options are.

Tracy Head

Mortgage Broker

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Mortgage Crisis

By Tracy Head • September 5, 2025
A wise broker friend of mine once told me there is no such thing as a mortgage emergency. I think this may depend on whose perspective this is. I’ve thought about her statement over the years. I think what constitutes a mortgage emergency really depends which end of the transaction you are on. One situation I run into regularly is clients who have left dealing with their mortgage renewal until the bitter end. This doesn’t necessarily constitute a mortgage emergency if you are not planning to make any changes to your mortgage and you intend to stay with the same lender. However, if you are in a private mortgage that was intended to be a short-term solution leaving your renewal until the bitter end can put you in a precarious position. Not all private lenders automatically offer renewals. Some charge a significant fee to renew for another term. Some will renew but dramatically increase your rate. If your plan was to move to a traditional lender once your private mortgage comes up for renewal this process can take weeks and in some case months. Depending on your situation a refinance to pay out your private mortgage can be very challenging right now with stricter qualifying guidelines and higher interest rates. Sometimes clients are proactive with their plan to move from a private mortgage and we run into problems and additional document requests from the new lender or challenges like delays in getting appraisals done. Whether you are in a private mortgage or your mortgage is with a traditional lender I suggest you start looking into renewal options about six months ahead of your maturity (renewal) date. We can lock down an interest rate hold for you four months ahead of your maturity date but I love to have a conversation with my clients about six months prior so we can develop a plan as to how we will handle their upcoming renewal. Not all lenders offer an open mortgage at renewal so if you dawdle too long you may end up locked in with your current lender for a bit longer. If you have left your mortgage renewal until it is right around the corner don’t panic. Many lenders do offer an open mortgage so you can opt for this to buy yourself some time if you are planning to make any changes to your mortgage. Take some time to evaluate your options. Small tweaks can potentially make a significant difference to your bottom line so it is key to work with a professional that has your best interests at heart.

Early Renewal

By Tracy Head • August 27, 2025
Does an early renewal make sense? 2020 was a very busy year for home buying and mortgages. This means that 2025 is and has been a busy year for mortgage renewals as the majority of clients seemed to choose five year terms in 2020. I’ve had lots of conversations with my own and new clients about whether it makes sense to renew early. Each conversation is slightly different based on client needs and their individual circumstances. Most of the time I suggest that clients stay with their current lenders until their renewal dates because their current interest rates are anywhere between 1.6 per cent and 2.79 per cent. If you don’t need to make any immediate changes it makes the most financial sense to stay put until your term runs out. We can start the process of either switching or refinancing mortgages four months ahead of your renewal date and lock in a rate for you. As a generalization, when people ask about doing a straight switch (not adding any money to their mortgage) I will do a survey of what interest rates are available so they can go back to their lender to try to negotiate a great rate. Time and time again I’ve worked with clients on switches for them to cancel at the last minute as their current lender finally sharpens the pencil rather than lose the client. This is why I always try to help people negotiate with their current lender rather than put everyone through the work of having a new mortgage approved. If clients are wanting to add money to their mortgage to pay out consumer debt or pay for home renovations that changes things a bit. Some lenders are more aggressive with their refinance rates so it makes sense to make a move. Another situation has popped up this week that has had me crunching numbers for multiple clients. One of my favorite lenders came out with a quick-close rate special that is pretty hard to pass up. The fine print is that the new mortgage has to finalize within thirty days. I have been working on a refinance at renewal for clients that is set to close at the beginning of November. I took a look at how their current lender calculates the payout penalty when they are this close to renewal. It turns out they charge daily interest instead of a three-month interest penalty or interest rate differential. So I did the math. If we pay out early to take advantage of this great interest rate their payout penalty is around the $1000 mark. Over the term of the new mortgage they will save approximately $5500 in interest cost and their monthly payment will be about $85 per month less. Even after they pay out the penalty to move a bit early they will still be $4500 ahead over the term of their mortgage. This is one of the few times I’ve recommended that it makes sense to move forward ahead of the renewal date.  If you have a renewal coming up over the next few months I’d say it’s a good idea to connect with your mortgage person to look at what rates are available now and figure out whether it makes sense to consider making a move sooner rather than later. Lenders will pop up with rate specials from time to time so it is worth having your mortgage professional keep an eye open for you as your renewal date comes closer. It may just save you a significant amount of money.