Owning a home has plenty of benefits, but it’s not without challenges. Over one million mortgages in Canada are set to renew in the next few years, and many home owners will be faced with higher interest rates. If you’re in this situation, you may feel squeezed in two ways: a higher interest rate will cost you more over the life of your mortgage, and it could impact your cash flow and monthly budget.
If you’re renewing your mortgage this year, starting your research early can help you get the best possible interest rate, better manage your cash flow and stay on track with your financial plan. Here are five smart strategies for renewing or refinancing your mortgage in 2025.
1. Plan ahead for your mortgage renewal
A little planning goes a long way—especially when it comes to your finances. You may have your mortgage renewal deadline on the calendar, but home owners can typically renew their mortgage up to 120 days in advance. Starting your search early can help you find better rates and allows you to make an unrushed, informed decision.
If you aren’t sure when your mortgage renewal deadline is, contact your lender for details. The more you know about your current mortgage agreement, the better your position will be for comparing rates and terms for renewal. Not all mortgages are created equal.
2. Shop around and consider moving your mortgage
Switching mortgage lenders at renewal can often get home owners access to a lower interest rate, and it never hurts to shop around. Remember, you have more options than just the big banks—credit unions have some of the lowest mortgage rates in Canada.
For example, Cambrian Credit Union, which serves Manitoba residents through its branches in Winnipeg and Selkirk and its Digital Branch, is currently offering its new “Best of Both Worlds Mortgage.” Here’s how it works: lock in Cambrian’s lowest fixed rate right now—3.94% for a two-year term—plus, if something changes, you have the option to reset your rate once during the life of your term by locking in for a longer-term mortgage with Cambrian, penalty-free with no blended rates.
Plus, Cambrian offers flexible options like debt consolidation and refinancing. Every little bit helps: if you secure a 0.20% lower interest rate on a $350,000 fixed-rate mortgage loan, for example, you’ll save $3,340 over a five-year term. Plus, in most cases, Cambrian will cover your mortgage transfer fees when switching your mortgage over.
Renewing a mortgage in Manitoba?
Cambrian Credit Union’s “Best of Both Worlds Mortgage” puts you in control.
- Get Cambrian’s special offer: 3.94% for a two-year term.
- Choose to lock in for longer once during your term if something changes—penalty-free.
- Rates subject to change. Terms and conditions apply.
3. Consolidate your loans
It may seem counterintuitive, but adding to your mortgage balance can sometimes save you money. Here’s how it works: if you’re carrying high-interest credit card debt (typically charging annual interest of 20% or more) or you need to borrow funds for home repairs, a new vehicle or another major expense, you can use your home equity to access funds with a lower interest rate.
Let’s say, for example, a home owner has $10,000 in credit card debt and needs $15,000 for a home renovation. When they renew their mortgage, they could borrow another $25,000 to cover these costs. Their mortgage balance will be higher, but consolidating their loans means paying less interest overall.
Debt consolidation isn’t for everyone, but if the math works in your favour, you’ll have fewer payments to manage and pay less interest in the long run.
4. Pay down your mortgage
The less you owe on your mortgage loan, the less interest you’ll pay. If you have savings you can access without penalty—a savings account or a tax-free savings account (TFSA) with a healthy balance, for example—it could make sense to pay off a chunk of what you owe.
Ask your mortgage lender if you can make a lump sum payment—in many cases, you can make one or two extra mortgage payments per year without penalty. Cambrian Credit Union offers even greater flexibility: If you have a fixed-rate or variable-rate closed mortgage, you can prepay up to 20% of your original mortgage balance every year with no penalties. If you have a variable-rate open mortgage with Cambrian, you can prepay any amount, any time, without penalty.
5. Consider breaking your mortgage early
Switching mortgage lenders at renewal may lead to a better interest rate, but if you break your mortgage agreement early, it can result in a penalty fee. By doing the math on the potential penalty versus your interest savings, you can determine which option makes the most sense for your family. (Crunch the numbers with MoneySense’s mortgage penalty calculator.)
In some cases, you can avoid certain fees entirely—Cambrian Credit Union covers title insurance fees, property valuation fees and more for home owners who switch their mortgage. If you live in Manitoba, get in touch with Cambrian’s team of mortgage advisors for more details.
Make the most of your mortgage renewal
Renewing your mortgage is an opportunity to explore your options. Start early, shop around and look at everything that’s available to you. You may be pleasantly surprised at how much you could save.
This article is sponsored.
This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers.
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Read more about mortgages:
- Mortgage payments going up at renewal? Here’s what to do
- I want to switch mortgage lenders—do I have to pass the stress test again?
- The complete guide for first-time home buyers in Canada
- Mortgage payment calculator
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