Mortgage renewal calculator for Canada

The mortgage renewal calculator above compares what your payment is today with what it becomes under each renewal offer, using the balance you still owe, the years left on the amortization and the new rate. It also shows interest over the new term, the balance left to renew next time, a table of rates around your offer and the break-even rate that keeps your payment flat. For the payment on a new purchase, use the Canadian mortgage payment calculator instead.

How do you use this mortgage renewal calculator?

Use the calculator in this order: enter what you owe, what you pay now, and the offer in front of you, then flip the scenario controls.

1. Balance owing at renewal. Take this from your renewal statement or online banking on the maturity date, not the original mortgage amount.
2. Your current interest rate. The rate on the term that is ending. The calculator uses it to work out today’s payment.
3. Remaining amortization. The years left until the mortgage would be paid off if nothing changed. Your statement often shows it; otherwise subtract the years already paid from the original amortization.
4. Renewal rate offered and new term. This is Option A. Pick the term length on the offer.
5. Payment frequency. Applied to both today’s payment and the new one, so the comparison is like for like.
6. Amortization at renewal. Keep the years remaining, or model a different amortization to see the payment and interest trade-off.
7. Compare a second offer. Switch it on for Option B: another lender’s rate or a different term with your own lender, plus any upfront costs you would pay to take it.
8. Advanced options. If you have prepaid or pay more than the minimum, choose to enter your actual payment. If your mortgage is variable and compounds monthly, change the compounding.

The three levers worth flipping first are the term, the amortization choice and the second offer. Each one changes a different part of the result, as the table below shows.

What does a mortgage renewal look like with real numbers?

A worked example shows the payment jump when a low-rate term renews at a higher rate. Take a household with a balance of $400,000 owing at renewal, a current rate of 1.99% and 20 years left on the amortization, paying monthly. Their lender offers 4.29% for a new five-year fixed term. Another lender offers 3.99% for five years, but switching would mean about $1,500 of legal and appraisal costs.

Today’s payment, worked out from the current rate and the years left, is $2,020.09 a month. At the renewal rate over the same 20 years, the payment becomes $2,477.40, an increase of $457.31 a month, or about $5,488 a year. That is a rise of 22.6%.

Option B costs about $4,095 less over the term even after the switching costs. It would stay ahead as long as the costs of moving were under $5,595. Whether the household could actually switch depends on the new lender’s qualification rules, which the mortgage stress test guide walks through.

The rate difference also changes where the payment goes. Under Option A the first monthly payment carries about $1,417.38 of interest, against about $660.60 at the old rate. Over the five years, interest is $42,383 higher than if the old rate had continued, and the balance left to renew in five years is $14,945 higher too.

What rate keeps my mortgage payment the same at renewal?

The rate that keeps your payment unchanged is the break-even rate, and it depends on the amortization you renew at. With the remaining amortization unchanged and a mortgage paid on schedule, the break-even rate is simply your current rate: any higher offer raises the payment. A longer amortization raises the break-even rate, because the balance is spread over more payments.

For the example household, the calculator’s amortization table gives these break-even rates against today’s payment of $2,020.09:

How to read it: moving from 20 to 25 years absorbs most of the payment shock, but the interest paid by the time the mortgage is gone rises from $194,575 to $250,230 if the rate never changed, an extra $55,655. During the five-year term, the 25-year option repays only $50,046 of principal instead of $70,728. Whether a lender offers a longer amortization at renewal is its decision; the maths only shows the trade-off.

How much does each half point of rate change the renewal payment?

On the example balance, each half percentage point adds roughly a hundred dollars a month. The calculator’s rate scenario table runs the same balance, amortization and term at rates from well below to well above the offer:

• At 3.79%: $2,373.72 a month and $68,601 of interest over five years.
• At 4.29% (the offer): $2,477.40 and $77,915.
• At 4.79%: $2,583.34 and $87,278.
• At 5.29%: $2,691.50 and $96,685.

So negotiating the offer down by half a point would save about $103.68 a month and $9,314 of interest over the term. That is the number worth knowing before calling your lender or a broker. The table also doubles as a what-if for a variable rate: find the row nearest where the rate might go.

How does the maths work?

The calculator follows the same steps a lender’s system does, in plain terms:

1. Rate per payment. A quoted Canadian fixed rate compounds twice a year. The calculator turns the annual rate into an effective six-month rate (half the quoted rate), then into the equivalent rate for one payment period. For monthly payments that is the six-month growth factor raised to the power of one-sixth, minus one. With monthly compounding selected, the rate per monthly payment is simply the annual rate divided by twelve.
2. Payment. The payment is the standard annuity formula: the balance times the rate per payment, divided by one minus the discount factor over the number of payments left. Accelerated bi-weekly and weekly payments are the monthly payment split in two or four, paid 26 or 52 times a year.
3. Today’s payment. When you let the calculator work it out, it uses your current rate over the years remaining. For a mortgage paid on schedule with no prepayments, that gives back exactly the payment set when the term started, because an amortizing loan re-amortized at the same rate over its remaining life keeps the same payment.
4. Running the term. Each payment period, interest is the balance times the rate per payment; the rest of the payment reduces the balance. Adding these up over the term gives interest paid, principal repaid and the balance left to renew.
5. Break-even rate. The calculator searches for the highest rate at which the payment for a given amortization does not exceed today’s payment, narrowing the range by halves until it is precise to a tiny fraction of a point.
6. Term cost. For each offer, interest over the term plus upfront costs. The principal you repay is equity you keep either way, so it does not belong in the comparison of offers with the same term.

The results are checked in automated tests against closed-form formulas for the payment and the remaining balance. The mortgage amortization guide explains the schedule side in more depth.

When does a mortgage renewal happen, and what happens at each stage?

A renewal happens when your term ends, not when the mortgage is paid off. Most Canadian mortgages have a term shorter than the amortization, so most borrowers renew several times. The dates and required notices come from your mortgage contract and federal rules for federally regulated lenders; the Financial Consumer Agency of Canada’s renewal page sets out what your lender has to tell you. A practical timeline looks like this:

If switching lenders is on the table, whether the new lender re-applies the stress test depends on whether the move is a straight switch (same loan amount, same remaining amortization); modelling Option B with a longer amortization would not be one. The stress test explainer covers those rules, which sit outside the maths here. If you are thinking of breaking your current term before it ends to grab a rate, the mortgage penalty calculator shows what that could cost first.

Should I choose a fixed or variable rate at renewal?

Neither is right in general; the choice depends on how much payment uncertainty your budget can absorb. A fixed rate keeps the payment and the interest for the term known in advance, which is what this calculator’s main result shows. A variable rate moves with the lender’s prime rate, so the calculator’s result is only a snapshot at today’s rate. Use the rate scenario table to stress your own budget: if the payment at a rate one or two points above the offer would be hard to carry, that tells you something about the risk. The fixed vs variable mortgage guide compares how the two types behave, including how some variable mortgages keep the payment fixed while the amortization moves.

What are the most common mortgage renewal calculation mistakes?

• Using the original mortgage amount. The renewal payment is based on the balance owing at maturity, which is lower than what you first borrowed.
• Using the original amortization. After a five-year term on a 25-year mortgage, 20 years are left. Plugging in the original amortization understates the payment.
• Comparing payments instead of total cost. A lower payment from a longer amortization is not a cheaper mortgage. Compare interest over the term plus costs, and check the balance left at the end.
• Ignoring switching costs. A slightly lower rate elsewhere can lose to your current lender once legal, appraisal and discharge costs are counted. The decision brief shows the cost at which the two offers break even.
• Mixing payment frequencies. Comparing a monthly payment today with a bi-weekly offer makes the new payment look smaller than it is. The calculator uses one frequency for both.
• Using a US calculator. US tools compound monthly. For a Canadian fixed rate that slightly overstates the payment and the interest.
• Forgetting that today’s payment might include extras. If property tax is collected with your mortgage payment, the figure on your bank statement is higher than the principal and interest payment the calculator compares.

How can a payment increase at renewal be softened?

The maths offers four levers, each with a cost. A lower rate is the only one that lowers both the payment and the interest; the rate table shows what each half point is worth. A longer amortization lowers the payment but repays less principal and adds interest by payoff. A lump-sum payment at renewal reduces the balance the new payment is based on; the mortgage prepayment calculator shows what extra payments during the term do. A different payment frequency does not change the cost much on its own, but an accelerated schedule repays more principal each year. Running each lever through the calculator with your own balance shows which trade-off fits, and the HELOC calculator covers the cost of borrowing against home equity if a lender suggests that instead.

When is it worth talking to a mortgage professional?

A mortgage broker or your lender’s mortgage specialist can quote rates you cannot see online and confirm what your lender allows at renewal, such as extending the amortization, adding a lump sum or blending a new rate. It is worth a conversation when the payment increase in this calculator is more than your budget can handle, when you are considering switching lenders and need to know whether you qualify, or when you want to combine a renewal with a refinance or a move. A fee-only financial planner can help decide whether spare cash is better used on the mortgage or elsewhere. This page is education, not advice: the calculator shows the maths, and the decision depends on your full situation. The Canadian mortgage lenders comparison lists who to ask for a second offer.