How Early Can You Renew Your Mortgage Before The Maturity Date?

Mortgage Renewal

A mortgage term is the number of years in which the conditions of your mortgage have a legal effect. So after your mortgage term expires, you will need to either pay your mortgage in full, refinance it or have it renewed. In Canada, mortgages are usually renewed by borrowers. As a homeowner, how early can you renew your mortgage before the maturity date? How do early renewal and regular renewals work? This article discusses when you can start renewing your mortgage, how you know it’s time to renew your mortgage, why it’s better to renew early, and whether or not you should go with your current lender. 

How it Works

Canadians shouldn’t get confused between the mortgage amortization period and the mortgage term. The amortization period is the number of years that it takes for the borrower to pay off the loan completely while the mortgage term is much shorter; it’s usually for just a few years.

Both the lender and the borrower are legally obliged to the parameters of the mortgage term. Before the term expires, the lender will usually send the borrower all the necessary papers needed for renewal. However, as the mortgage borrower, you aren’t required to renew your mortgage with the same lender. Some Canadian borrowers would look for another lender that offers better terms. This is why you need a mortgage broker for help — we can help you find a lender that would suit your needs. 

How early can you renew before the maturity date?

Your lender will send the renewal statement at least 21 days before your mortgage expires. If the lender decides not to renew your mortgage, you will also be notified at least 90 days before term expiry. The statement will contain the balance of your loan, the interest rate, term, frequency of payment, and any charges that will apply. You may also get a renewal contract should the lender decide to offer you a renewal. 

If you get the renewal contract from your lender, we recommend that you take your time exploring the mortgage options available. Take time to decide on a new mortgage term by exploring the many options available to you. The most effective way to get the best mortgage term is to research the market. You also don’t need to wait for the lender to get in touch with you; in fact, you are allowed to renew your mortgage at least 4 months before the term expires. This gives you enough time to shop around and check for better rates. 

You can get a better interest rate early and have enough time to weigh your options. However, you need to always reach out to a professional who can assist you better. This is where our years of experience come in. Lend Today is committed to helping Canadian homeowners find the best mortgage terms. Also, we would recommend that homeowners renew their mortgage at the right time to avoid large prepayment penalties. With early renewal, you will get more interest savings and fewer penalties.

What You Need to Do Before the Maturity of your Mortgage

Before shopping around for the best mortgage rates, it’s crucial that you assess your needs and your financial situation first. 

Household finances and how they affect your mortgage renewal options

A shorter term usually means that you will get better interest rates for your mortgage. However, you will need to assess your financial situation first and whether or not you can afford higher monthly payments. How has your annual working income changed in the last few years? Has your annual income changed or has your business revenue increased? Perhaps you started a family and are making different life plans. You will need to find out whether or not you will fully complete the term without missing any payments. We can help you navigate through your mortgage contract. We can help you find the best mortgage that will work with your financial situation. 

You need to also consider your future plans and other factors before renewing your mortgage term. Do you have a second mortgage that you’d like to consolidate with your existing mortgage? What about personal loans or other financial obligations? Sit down with us so we can fully assess your financial situation and recommend the best solutions. 

Should You Switch or Stay With Your Current Lender?

If you don’t have any missed payments, your lender will be happy to renew your mortgage term. Also, you may be able to renegotiate better terms with your lender. This does not mean that you should not shop around to find the best possible interest rate you qualify for. Speak with your mortgage broker to help you make an informed decision.

One of the benefits of getting a new lender is the lower interest rates. You can really save money and interest if you can find a lender with better terms and conditions. We work with a variety of mortgage lenders and can help you find the right fit. LendToday can also help those borrowers that have been turned down by banks or other lenders to obtain suitable financing.  

There may be costs involved when you decide to switch, such as discharge costs and other fees. We have years of experience navigating through the various mortgage contract in today’s market.

Contact Lend Today

When is the maturity date of your mortgage term? Talk to us so we can help you get started with the renewal process. At Lend Today, we don’t just help homeowners with bad credit acquire a mortgage; our goal is also to help homeowners get better interest rates and avoid higher fees. In addition, we offer a quick turnaround time to get you approved.

Our team has been helping Canadian homeowners for years. We have a team of mortgage brokers who have worked with several lenders in the past. We consult with you to uncover your needs to get a mortgage solution that works for you. Get in contact with us today to learn about your options.

David Cumberbatch