What to ask before renewing your mortgage this year

(NC) Roughly 1.2 million Canadian mortgages are up for renewal in 2025, according to the Canada Mortgage and Housing Corporation (CMHC).

85 per cent of these mortgages were opened when the Bank of Canada's key lending rate was at or below one per cent.

As many Canadians prepare to renew in a higher-rate environment, a recent survey found that more than a quarter of respondents don't have a strong understanding of how to make their mortgage more affordable.

Here are some questions to think about if your mortgage is up for renewal this year:

Should I choose fixed or variable?

A closer look at your financial situation and any changes to your income can help you determine which type of interest rate is best for you ahead of renewal.

If you’re carrying a lot of debt or your income is inconsistent, a fixed rate mortgage could be a good fit. A fixed interest rate won’t change throughout the term of the mortgage, and neither will the payments.
"It really comes down to the amount of flexibility in your debt service ability," says Gino Caputo, a senior real estate lending VP at TD. “But if a homeowner has increased their income, they might be open to choosing a variable rate mortgage and managing higher monthly payments or a longer amortization period if interest rates go up in the future.”

Am I interested in a mortgage renewal or refinance?

Renewing a mortgage isn't the only option. If you’re looking to access more funds from the equity in your home, or thinking about consolidating debts, you might choose to refinance your mortgage instead of renewing it.

If you’re planning to sell the home soon, it could mean choosing a shorter term and an open mortgage. Having flexibility with your mortgage products can be important when considering a sale.

When should I ask for advice on my mortgage renewal?

To access trusted advice about mortgage costs, be proactive, start early and don't leave the process until the last minute.

It's a good idea to reach out to your bank or other lenders six months in advance to start the discussion, take stock of your personal circumstances and help inform your decision-making.