If you’re like most Canadians, you only think about your mortgage renewal once every five years. This usually happens when the bank sends you that renewal notice in the mail to let you know that rates have gone up, down or sideways. But, what if you’ve been doing it all wrong? Did you know there has never been a better time to review mortgage renewal options than right now?

Scrabble letters spelling mortgage

What is a Mortgage Review

So what do we mean by a ‘mortgage review’?

A mortgage review may identify ways to optimize your financing to suit your current and future needs. A licensed mortgage broker who has access to dozens of lenders may find a better mortgage that can save you money or access equity for many reasons. Best of all, most mortgage brokers will provide this service free of charge.

Why Should You Have a Mortgage Review

Getting a mortgage sucks, so why go through the hassle of a mortgage review? 

So many things can happen between the day you sign your mortgage contract and when the mortgage renews. Interest rates change, markets move and life happens. Your circumstances today are likely much different than when you first started your mortgage.

Think about the past ten years in real estate in Durham Region. A single-detached house in Oshawa in February of 2012 (the first year the Toronto Real Estate Board published their Home Price Index online), sold for approximately $261,000. That same home today is worth around $1,021,500! You can use that extra equity for many reasons, listed below.

Fixed rate vs variable rate: Person in blue suit holding toy house

Reasons for Refinancing Your Mortgage

There are many questions to ask when thinking about refinancing your mortgage. What is the new mortgage interest rate? What can you use the equity for? What are your future needs and will this mortgage contract suit those goals? 

A mortgage review helps discover if refinancing can benefit you with one of these results.

Save money with an early mortgage renewal

Did you know that your bank doesn’t offer you the lowest interest rate when you renew your mortgage?

After being a loyal customer for years if not decades, shouldn’t your bank offer you the lowest interest rate available? According to the CMHC, the average interest rate offered at renewal is 0.13% higher than the average interest rate available if you moved to a new lender. In fact, other lenders are so eager for your business that they’ll often pay the cost of switching your financing over to them.

Shopping around for a lower interest rate at your mortgage renewal can help you save tens of thousands of dollars over your lifetime. With interest rates currently approaching decades high, you should review your financing options 12 – 18 months before your renewal. So, why start this early?

Starting your mortgage renewal process early can allow a mortgage broker to hold a low-interest rate for several months. The advantage of this process is that you can choose to close your renewal early if interest rates increase after your initial application. We use this process to save dozens of our clients tens of thousands of dollars each year!

To determine whether you’ll save money with a lower interest rate, your mortgage broker will review:

  • The amount of interest paid in your current mortgage to the end of the remaining term
  • The total cost of refinancing (prepayment penalties, discharge fees, legal fees etc…)
  • The amount of interest you will pay over your current remaining term

A good rule of thumb is: if your current mortgage interest rate is more than one percent higher than current refinance rates, you may save money by refinancing.

Debt consolidation

According to MNP’s Consumer Debt Index Survey, 51% of Canadians worry about their ability to pay their debts. Many high-interest forms of debt such as credit cards and lines of credit make it difficult for Canadians to manage their monthly finances.

With mortgage interest rates lower than interest rates for lines of credit and credit cards, using the equity in your home to pay down debt can save you a lot of money. A refinance can allow you to combine high-interest debts into a lower-interest loan. Not only will you save money, but you may reduce monthly payments and increase your financial stability.


As we’ve learned already, a home is a fantastic investment. Think of the amount of wealth you’ve built in your home over the last ten years. Have you thought about how owning real estate can help you plan for retirement? Or how it could end up paying for your children’s education (or their first home)? Real estate investment is an excellent way to build generational wealth.

Refinancing your home allows you to use your home equity to invest in another property. The rent from the tenant pays the property’s expenses and provide monthly income. Additionally, the property grows in value and the tenant pays down your home loan. As you reach retirement, you could end up with a debt-free asset that pays you an income each month.

Home improvements

Kitchen renovations completed using a refinance

Investing in your home is another way to help you build wealth. If you’ve owned your home for ten years or more, there are likely features that are out of date. Improving these features can help increase the value of your home (increasing your equity). According to the Appraisal Institute of Canada, the top five home improvements that increase the value of your home are:

  • Kitchen remodelling
  • Bathroom remodelling
  • Interior painting
  • Updating fixtures and flooring
  • Decluttering – yes, remove the unwanted junk in that garage and immediately improve your home’s resale value!

Why There’s Never Been a Better Time to Review Your Mortgage Renewal Options

So why is now the time to think about your mortgage renewal?

With interest rates increasing, you may be able to lock in a lower interest rate today than you’ll see when you reach your renewal. Working with a mortgage broker can help create a strategy to ensure you save money today and with future mortgage renewals.

Optimizing your finances today can save money, reduce debt and help you invest in your financial future. To speak to an expert about your upcoming mortgage renewal, you can contact us here.

About the Author

The column's goal is to level up your financial knowledge and help you avoid common pitfalls and mistakes along the way. Although money management sometimes seems like an intricate task, it doesn't have to be. The advice here is common sense and simple to follow. The first step to a better financial future starts here, and it's never too late to begin. Adam Stapley is a Mortgage Broker with Pineapple Financial and author of the personal finance Newsfeed CanadianFinanceGuide.ca. He is intensely passionate about helping Canadians build wealth through the power of real estate. Many of the articles in this column come from Adam's experience assisting Canadians to understand and shape their personal finances. Pineapple Financial Lic #12830 CanadianFinanceGuide.ca adam@canadianfinanceguide.ca