Becoming a homeowner can be equal parts empowering and daunting. It comes with increased independence and the opportunity to build equity, as well as responsibility for the property and managing your mortgage.

Even though a mortgage might have a 25 or 30 year total term, you’ll still need to make decisions on it periodically. That’s because your contract lasts for a shorter term, that can range from a few months to five years, or longer, before it has to be renewed. Renewal is also an opportunity to review your mortgage needs and make sure you have the right product for you.

To help you find the right mortgage, consider if:

  • Your budget has room for increasing your payments to pay off your mortgage sooner, which helps save on interest.
    • You’re likely to make additional payments.
    • You’re satisfied with the services offered by your current lender.

You don’t have to renew your mortgage with the same lender. If you find an option that better suits your needs, you can switch. Start shopping around with various lenders and brokers a few months before the end of your term, to know what they offer. If you’re considering switching, make sure you find out about any fees or costs that come with going elsewhere.

If you decide to keep your current lender, you may want to renegotiate a new interest rate. Tell them about any offers you’ve received from other financial institutions or mortgage brokers—your lender may ask for proof, so make sure you have the information on hand.

If interest rates are lower than they were at the start of your term, it could be a good opportunity to switch to a fixed rate. Locking in your payments at a lower rate can save you a lot of money in the long run.

Banks are required to offer products that are appropriate for you, so take the time to accurately describe your financial situation. Don't hesitate to ask questions, and make sure you understand the mortgage you want.

The Financial Consumer Agency of Canada has more information, tools and resources to help you make informed financial decisions when it comes time to renew. Learn more at canada.ca/housing.