How do mortgage renewals work?

Image of a man writing notes

Aside from mortgage interest rate, you will likely hear two other numbers related to your mortgage: amortization and term.

Amortization is the total amount of time until your mortgage is fully paid.

Term is the amount of time your mortgage interest rate will remain the same (if you have a fixed rate mortgage).

Once your term has expired, you need to decide if you want to renew your mortgage with your existing financial institution, switch your mortgage to another financial institution or pay off your mortgage in full.

Here are a few things to keep in mind when preparing to renew your mortgage.

Renew Early

At Cambrian, we allow you to renew your mortgage early, penalty free, within 120 days of your maturity date.

That means you are not stuck with whatever interest rates may be at your mortgage maturity date.  You can lock in a new mortgage rate and term up to 4 months before your mortgage matures.

We call that an early renewal and we have helped many homeowners save thousands of dollars by allowing them to lock in when rates are lower.

Switching to Cambrian at Renewal

If you are looking to switch your mortgage to Cambrian, you can lock in our low rate for up to 120 days prior to the date your mortgage matures at your existing financial institution.

That way, you have peace of mind that your rate is secured, and you can wait until the maturity date to make the switch, saving you any penalty fees. And we’ll pay your transfer fees.

Start your transfer online now

Here are few things to keep in mind when preparing to renew your mortgage.

Consider What Mortgage Type Works for You

While the majority of people choose a five year fixed rate mortgage to keep their mortgage payments consistent for a longer period of time, it may make sense for you to choose a different term depending on your personal circumstances.

Shorter terms carry lower interest rates, but also have the additional risk of rates rising upon your next renewal.

Another option to consider is a variable rate mortgage where your interest rate fluctuates with the prime lending rate. A variable rate mortgage is open, which means you can make additional payments, pay off the mortgage or switch to a fixed term, at any time, without penalty, giving you complete flexibility.

Consider your Payment Schedule

When renewing your mortgage, one of the things you’ll have to choose is how frequently you make mortgage payments.

Standard mortgage payments are monthly payments, but you can choose semi-monthly, bi-weekly or weekly payments depending on your preference.

Start Looking Early

If you’re looking to switch your mortgage, it’s best to speak to a Cambrian Lending Specialist three to six months before your current mortgage term ends. This will give you time to explore your options and find the best rate and term for you, and go through the process of switching your mortgage prior to your renewal date.

Talk to a Cambrian Lending Specialist about your upcoming mortgage renewal.