Time to renew your mortgage?  

When you secure a mortgage from a lender, the agreement is set for a defined period known as the mortgage term. Your mortgage term can vary from a few months to several years, typically up to five years or more. At the conclusion of each mortgage term, unless you've paid off the mortgage entirely, you’ll need to renew it. Since paying off a mortgage often takes many years, you'll likely go through several terms before fully repaying the loan.

You can begin the mortgage renewal process up to 180 days (6 months) before your current term ends. By starting early, you give yourself ample time to fully explore your mortgage options. Your renewal offer often includes a rate guarantee covering the remaining period before your term expires.

While renewing and refinancing both lead to a new mortgage contract, they are distinct processes.

Renewing a mortgage means extending your current contract with potential changes to the interest rate, amortization period, or term. Essentially, it’s a continuation of your existing mortgage, often with updated terms.

Refinancing is the process of replacing an existing mortgage with a new one, typically to obtain new terms, such as interest rate, payment, or amortization, and sometimes to increase the mortgage amount to cover additional borrowing needs.  Refinancing entails an application process to determine eligibility, and there are potential fees involved, that can vary depending on your specific terms and application

A mortgage payment is the amount of money you pay towards your mortgage — typically on a biweekly or monthly basis. Mortgage payments are made up of mortgage principal and interest.

The principal is the amount you borrow (mortgage amount). For example, if you have a $500,000 mortgage, the principal is $500,000. The mortgage lender charges interest on your principal, adding to the amount you owe.

When you start paying your mortgage, a larger portion of your payment goes towards interest. As you pay down your mortgage, the interest portion decreases so more of your payment goes towards paying off your principal.

The mortgage amortization period is the actual number of years (mortgage length) it will take to repay a mortgage loan in full, based on the interest rate for your current mortgage term.

This may go beyond the term of the mortgage contract. The mortgage term refers to the period over which the interest rate, payment, and other mortgage conditions are set.

For example, mortgage agreements often have 5-year terms but 25-year amortization periods. At the end of the term, the mortgage is up for renewal, and you may choose to renew your mortgage or pay it out completely without any prepayment charge.