Canadian Mortgage Renewal Calculator

What the mortgage renewal calculator does

The calculator shows what your monthly payment will be when you renew at a new rate. At the end of each term the remaining balance has to be renewed, usually at a different rate, and the tool recalculates the payment over the years you have left. Rates can be very different from when you first borrowed, and the new payment sets your budget for the next several years.

How renewal differs from a new mortgage

A new mortgage is priced over the full amortization, often 25 years. By renewal several years have passed, so the balance is lower and the remaining amortization shorter, and the payment is recalculated on that balance over those years at the new rate. The renewal payment is therefore not just your old payment at a new rate.

The role of the new rate

The renewal rate is the biggest driver of the new payment. After a period of rising rates, many borrowers renew well above their original rate. Because Canadian mortgages compound semi-annually, the calculator converts the quoted annual rate to the effective monthly rate before working out the payment.

How to use the calculator

1. Enter your balance at renewal.
2. Enter the rate you expect or have been offered.
3. Enter the remaining amortization in years.

The result shows the new monthly payment, the interest still to come, the total you will pay over the remaining amortization and the effective monthly rate used.

A worked example

You have $400,000 left at renewal, renew at 4.5% and have 20 years of amortization left. The effective monthly rate is about 0.3715%, and over 240 payments the new payment is about $2,522 a month. Over those 20 years you pay about $205,189 in interest, about $605,189 in total.

At 5.5% instead, the payment rises to about $2,738 and the interest to about $257,016, so one point adds over $200 a month and more than $50,000 of interest.

With only 15 years left at the same $400,000 and 4.5%, the payment is about $3,051 over 180 payments, but interest falls to about $149,265 because the balance is cleared five years sooner. Two borrowers with the same balance and rate can face quite different payments because of the remaining amortization.

Making the most of renewal

• Compare offers. The first renewal letter is rarely the best rate available, and even a small improvement adds up over the next term.
• Adjust the amortization. Shortening it raises the payment but cuts total interest; lengthening it does the reverse.
• Make a lump sum. Paying down the balance before renewal lowers the payment for the whole next term.

What to check before you sign

A renewal letter usually arrives a few months before the term ends, and the rate it quotes is a starting point. You can negotiate with your current lender, approach others, or use a broker to survey the market.

Switching used to mean passing the mortgage stress test again. Since November 2024, federally regulated lenders no longer have to apply it to a straight switch at renewal, where the balance and amortization stay the same. A new lender still reviews your income, credit and property, and borrowing more or extending the amortization is treated as a new application, so confirm the requirements before relying on a lower rate elsewhere.

Common mistakes at renewal

• Signing the first offer without shopping.
• Assuming a switch is automatic; the new lender still has to approve you.
• Forgetting that the payment is recalculated on the current balance over the remaining years.
• Treating the renewal payment as your full housing cost.

Using the calculator before your term ends

Run the numbers well before the letter arrives. Enter your expected balance and test several rates, including one comfortably above today’s, so a higher renewal does not surprise your budget. If you can make a lump-sum payment first, rerun with the lower balance, and try a shorter amortization to weigh higher payments against lower total interest.

Assumptions and limits

The result covers principal and interest only and assumes one rate for the remaining amortization, which will change at each future renewal. It excludes property tax, heat, condo fees and insurance, and any penalty for switching lenders mid-term rather than at renewal. Confirm the rate and payment with your lender or a licensed mortgage professional.

This article is general information only and is not financial advice.

About This Canada Mortgage Renewal Calculator

Use this canada mortgage renewal calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.