You have a mortgage and now it’s time to renew. What do you need to do next? 

While auto-renew options offer convenience, taking the time to understand the mortgage renewal process, being proactive and asking the right questions will equip you to renew in a way that’s distinctly personal. Life isn’t one-size-fits-all—mortgage renewals shouldn’t be either. 

Dive into ten questions to ask so you can navigate your next mortgage term with confidence. 

1. Has my life situation changed since the start of my current mortgage term?

Maybe your household income has increased, which could give you more flexibility in the amount you can put towards mortgage payments. 

On the other hand, you may have experienced a job loss, illness, taken on more debt or started a family. In those scenarios, you might be looking to secure a manageable payment schedule at a fixed rate. 

Whatever the changes may be, this is a great time to review your current household budget. This way, you'll get refreshed on how much money you can afford to put towards your mortgage, whether it’s more or less than your current payment. 

Understanding your current situation will allow you to navigate your mortgage renewal options with your needs in mind. Talk with a mortgage specialist to go over how to make the best changes for your budget.

2. What’s the difference between a mortgage amortization and term?

Amortization is the number of years it will take to pay off your mortgage, while your term is the length of your current mortgage agreement. The most common term length is five years, and the end of your term is called your “maturity date”.

You can decrease your amortization by increasing your payment frequency, or by paying lump sums towards your principal (the original amount you borrowed from a lender).

If you have a longer amortization period, you’ll have lower mortgage payments since they’re spread across a longer period of time. The trade-off is that you’ll end up paying more in interest in the long run.

3. What are my options at the end of my mortgage term?

When your term ends, you can choose to pay off your balance or renew for another term. Planning on renewing? You can stick with your current provider or switch to a new one. 

Most mortgages offer an early renewal time period of up to 120 days, depending on the terms and conditions of your mortgage. Your financial institution will reach out to you with offers on various terms and rates. If you opt to renew during this early renewal period, you simply agree to the terms and conditions provided and the effective date. You can wait to provide renewal instructions up to the exact renewal date. If you don't accept a term and rate by your renewal date, you'll be placed into a six month open term.  

Thinking about switching to another bank? You'll have to apply to qualify for a new mortgage. This process includes appraisals, income verification and a credit check. There will also be fees to complete the mortgage transfer, including legal fees and land title transfer. If you pay out the mortgage before the exact renewal date, you may be subject to prepayment fees. It is also important to consider your mortgage loan protection when switching to a new financial institution. It could be impacted if there has been changes to your health and you may not be covered by the new bank. 

Changing mortgage providers can be costly, both in fees and the time you're investing up front. On the other hand, it's common to see mortgage renewal rates that are slightly higher than new or switch rates. Learn more about how mortgage rates are determined. 

Read on to discover how to figure out the best type and term of mortgage for you.

4. What’s the difference between a closed and open term mortgage?

A closed term offers a lower interest rate, with less flexibility. You’ll be restricted when it comes to paying down or paying off your mortgage early, or switching lenders.

On the other hand, an open term allows for more flexibility, with slightly higher interest rates. You can make additional payments of any amount—including paying off your mortgage in full—whenever you want.

5. How long of a term should I go for? Is a longer mortgage term always better?

There’s no general rule about the length of a mortgage term—you’ll need to do some investigating to choose the best option for you. Consider factors including whether you’re planning on paying off your mortgage early, interest rate forecasts, the best rates available and possible life changes in your own future. You don’t have to make this decision on your own. Connect with a mortgage specialist to get equipped with the knowledge you need to choose the best option for you.

6. What are the pros and cons of fixed versus variable rates?

A fixed rate means the interest rate and payment stay exactly the same to the end of your term, no matter what’s happening in the markets. If you’re on a budget, fixed rates can provide security. However, if your mortgage was secured at a higher rate, you’ll have to stick with that rate even if the prime lending rate decreases.

Variable rates adjust with prime lending rates—if rates go down, you’re able to pay down your mortgage faster. Variable rates can leave you open to some risk, since you could pay more interest if the prime lending rate increases.

7. What if I currently have a lower household budget because of lost income or retirement?

Start by sharing this with your mortgage specialist at renewal time. You don’t need to requalify with a mortgage renewal, so they'll work with you on your overall financial situation, alongside your renewal. 

Also, take the time to revisit and reallocate (if necessary) your current monthly household budget when monthly income has been lowered. This boosts your financial wellness overall, which only makes your mortgage renewal less stressful.

8. I received an inheritance and would like to use some of it to pay down my home. How should I factor that into my mortgage renewal?

If you anticipate an influx of cash, a promotion or a big bonus, you could consider an open term mortgage, which offers extra flexibility to pay down or pay off your mortgage. 

While some closed term mortgages often provide the option of paying up to 20% of your original principal amount of your mortgage each year without penalty, this rule doesn’t apply at the time of renewal. If you have an ATB mortgage, you can pay as much as you want when you renew. 

Investigate your options and collaborate with an expert to figure out the best option for your life.

9. What if I plan on selling my home at some point during the term?

Whether it's moving into a larger space (or downsizing), finding the perfect home in your dream neighbourhood or relocating your family, life happens, and you may choose to sell your home at some point during your term. When renewal time comes, your plans to sell your current home should guide your decision, whether it indicates your term or if an open mortgage is your best option to limit prepayment penalties and fees. Some mortgages offer the flexibility of blending, extending or porting your mortgage.

Blending and extending a fixed rate mortgage lets you buy another home and refinance before your maturity date without paying a prepayment penalty. 

You can also take your mortgage with you, making it a portable mortgage. If you qualify for the mortgage on your new home, you can transfer your mortgage over with the same terms as your existing one. 

Before you make any decisions, check the conditions of your mortgage for porting and extending options, and connect with a mortgage specialist to lead you through the process. 

10. How early can I lock in a new mortgage term?

You can commit to a new term 120 days before your term matures. Evaluate your current situation and the interest rates, and make an appointment with your banker around 150 days before your mortgage matures. This gives you plenty of time to consider your options, and lock in the mortgage term that works for you.​​​​​​​​

Whether you're renewing your mortgage for the first time or you’ve done this before, we’re here with the expertise you need to power your next step. Stop by your branch to talk to one of our specialists about your mortgage options.