Mortgage Renewal Calculator
Your mortgage term is ending and the rate is about to change. Enter what you owe, your current rate and the years left to pay it off, and see the payment you are renewing into, the extra interest, and what it takes to keep your payment where it is. It uses Canadian mortgage math (interest compounded twice a year), the same engine as the full Headroom calculator.
Why a renewal can change your payment so much
A Canadian mortgage has two clocks. The amortization is how long the whole loan takes to pay off, often 25 years. The term is how long your rate is locked, usually five. When the term ends you renew the balance you still owe, for the years you still have left, at whatever rate is on offer then.
Your payment is rebuilt from those three numbers. Someone who locked in below 2% in 2021 and renews near 4% today can see a jump of several hundred dollars a month, even though the balance has shrunk, because far more of each payment now goes to interest.
| Input | Effect |
|---|---|
| Rate | The big one. Every 0.10% on a $400,000 balance with 20 years left is worth about $21 a month. |
| Years left | Fewer years means a bigger payment for the same balance. Lenders rarely stretch the amortization at renewal unless you requalify. |
| Balance | What you still owe. A lump-sum prepayment at renewal lowers it, and the payment with it. |
A worked example
A $400,000 balance with 20 years left, renewing from 1.89% to 4.34%. The payment goes from $2,001 to $2,488 a month, $5,838 more a year. Over the next five-year term that is $78,850 of interest instead of $33,719.
To keep paying $2,001, the mortgage would run about 29.3 years instead of 20. Or a prepayment of about $78,222 at renewal keeps both the payment and the payoff date where they are.
Ways to soften a renewal
Shop around
The rate in your renewal letter is often not your lender's best. Since November 21, 2024, switching an uninsured mortgage to another lender at renewal no longer requires the stress test, as long as the balance and amortization don't go up. Insured mortgages could already switch without it.
Prepay at renewal
At renewal you can pay down any amount without a prepayment penalty. Even a partial lump sum lowers the payment you renew into.
Ask about a longer amortization
Stretching the remaining years brings the payment down but costs more interest overall. Lenders usually only allow it if you requalify, so ask before you count on it.
Common questions
What is the difference between the term and the amortization?
The amortization is how long the whole mortgage takes to pay off. The term is how long your current rate and conditions last, usually five years. Most Canadian mortgages are renewed several times before they are paid off.
Do I have to pass the stress test to switch lenders at renewal?
Not for a straight switch. Since November 21, 2024, federally regulated lenders don't have to apply the stress test when an uninsured mortgage moves to them at renewal with no increase in the balance or amortization. The new lender still reviews your application.
Can I pay down my mortgage at renewal without a penalty?
Yes. Prepayment penalties apply during a term. At renewal you can put down any amount, which is why it is the cheapest moment to use savings to bring the payment down.
Is this calculator exact?
It uses the same monthly-payment formula lenders use for fixed-rate mortgages, with interest compounded twice a year. Your lender's figure can differ by a few dollars depending on the payment date, payment frequency and exact balance on the renewal day.
See what the renewal does to your budget
Headroom's renewal check shows the same numbers next to your saved budget: the new mortgage line, your share of income before and after, and whether the budget still balances. Free, and nothing leaves your browser.
Open it in Headroom