Blog And Articles

Mortgage Renewal vs. Mortgage Refinance

Jon Kamin

20 Feb 2020 Mortgage Refinancing

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What Is a Mortgage Renewal?

A mortgage renewal takes place at the end of your existing mortgage term if you still have a balance owing on your mortgage. Renewing a mortgage allows you to simply continue with the previously agreed upon rate on a new term. Mortgage renewals also present borrowers an opportunity to renegotiate the terms of their mortgage contract – length, rates, fees & stipulations can all be revaluated between lender and borrower.


What Is Mortgage Refinancing?

Mortgage refinancing is when a homeowner takes out a new loan to pay off their original mortgage(s), typically in order to reduce their interest rate. Generally, the loan used for refinancing has its own terms, unique from the original mortgage and can be from a separate lender.


Should I Refinance My Mortgage?

Unlike a mortgage renewal which takes place at the end of your term, refinancing can take place throughout the mortgage term. This can make it difficult to decide if it is in fact the right time for a borrower to refinance their mortgage. Here are some common reasons Canadians opt to refinance.

  1. Refinancing to access home equity
  2. Refinancing to lower your mortgage rate
  3. Refinancing to consolidate debt
  4. Refinancing to convert to a variable or fixed rate mortgage
  5. Refinancing to shorten loan terms