Should You Renew, Refinance, or Prepay Your Mortgage? Here’s How to Decide

Mortgages are one of the biggest financial commitments Canadians make. As interest rates fluctuate and personal financial goals evolve, many homeowners find themselves asking the same question: should I renew, refinance, or prepay my mortgage?

Each option comes with unique benefits and trade-offs. The right choice depends on your financial situation, long-term plans, and current market conditions. Let’s break it down.

1. Renewing Your Mortgage

When your mortgage term ends, you typically have the option to renew. Renewal means continuing with your current lender—either at their offered rate or after negotiating better terms.

• Best for : Homeowners satisfied with their lender and not looking to borrow more.

• Pros : Fast, convenient, and often requires minimal paperwork.

• Cons : If you don’t shop around, you could miss out on lower rates or better features from other lenders.

Tip : Always compare renewal offers with market rates before signing. Even a small difference in interest rates can save thousands of dollars over time.

2. Refinancing Your Mortgage

Refinancing means breaking your current mortgage and starting a new one—either with your existing lender or a new one. This option allows you to change the terms, borrow additional funds, or secure a lower interest rate.

• Best for : Homeowners looking to access equity, consolidate debt, or take advantage of lower rates.

• Pros : Flexibility to adjust your payment structure and unlock home equity for renovations, investments, or emergencies.

• Cons : You may face prepayment penalties for breaking your current mortgage early.

Tip : Calculate whether the savings from refinancing outweigh the penalties before making a move.

3. Prepaying Your Mortgage

Prepayment means putting extra money toward your mortgage balance—either through lump-sum payments or increasing your regular payment amounts.

• Best for : Homeowners with surplus cash who want to reduce debt faster.

• Pros : Lowers total interest costs and shortens your mortgage timeline.

• Cons : Money tied up in your home may limit liquidity for other investments or emergencies.

Tip : Check your lender’s prepayment privileges—most allow a certain percentage per year without penalties.

Which Option Should You Choose?

• Renew if you’re happy with your current mortgage and want a quick, easy option.

• Refinance if you need flexibility, want to consolidate debt, or can secure a significantly lower rate.

• Prepay if your priority is to become mortgage-free sooner and reduce interest costs.

How Ohmer Helps Canadian Homeowners

At Ohmer, we simplify mortgage decisions by giving homeowners access to:

• 📊 Smart financial dashboards that track monthly cash flow, equity growth, and expenses.

• 🏡 Real-time property insights so you can see how market conditions impact your home’s value.

• 🔑 Trusted realtors and mortgage specialists to guide you through renewals, refinancing, or prepayment strategies.

Whether you’re renewing, refinancing, or prepaying, Ohmer ensures you make decisions with clarity, confidence, and the support of AI-driven tools designed for Canadian homeowners.

👉 Ready to make the right mortgage move? Download Ohmer today and take control of your financial future.