According to the Bank of Canada, virtually all mortgages secured during the pandemic’s low-rate era will have gone through their renewal cycle by the end of 2026. If you are among the final wave of homeowners renewing this year, it’s time to start thinking about your options.
Whether you want to reduce monthly payments, access home equity, or explore new mortgage trends, being prepared can help you make the most of your renewal. Here are some tips to put yourself in the best position possible:
Start early
Reach out 4-6 months before your renewal date. Securing a 120-day rate hold now protects you from unexpected market shifts, giving us time to find the best deal tailored to your financial goals.
Leverage the stress test exemption
In late 2024, the federal banking regulator removed the stress test requirement for homeowners making a straight switch to a new lender. This means you no longer have to qualify at a higher rate just to leave your current bank, giving you the ultimate leverage to shop around.
Understand 30-year amortizations
You may have seen headlines about the government expanding 30-year mortgages. While those specific new rules apply to buying a home, extending your amortization at renewal is still a powerful tool if you are facing payment shock. By stretching your mortgage back out to 30 years, you can significantly reduce your mandatory monthly payment.
However, doing so at renewal is considered a refinance. This means you need at least 20% equity in your home, you may incur refinancing fees, and you will need to re-qualify under the mortgage stress test. We can run the numbers to see if extending your amortization is the right move for your cash flow.
Consider variable rates
With the Bank of Canada steadily lowering its policy rate down to 2.25% recently, variable-rate mortgages are highly attractive again. If you’ve been in a fixed-rate mortgage, it is worth discussing a switch for potential cost savings.
Review your financial goals
Has anything changed since your last mortgage negotiation? Whether you want to pay off your mortgage faster or free up cash flow, now is the time to align your mortgage with your current priorities.
Leverage your home equity
If you’ve built up equity, you can tap into it to consolidate debt, invest, or fund big expenses like home renovations. We can explore options to access equity while keeping payments manageable.
Shop around for the best rate
Don’t assume your current lender offers the best deal. Thanks to the relaxed stress test rules, I can easily compare multiple lenders and options for you, saving you time and money.
With a little preparation, your mortgage renewal can open doors to new opportunities and help you build a stronger financial future. Reach out today to start the conversation.
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