For many homeowners in London, Ontario, the period leading up to a mortgage renewal can be filled with anticipation and a bit of anxiety, especially concerning interest rates. Interest rates can significantly affect your mortgage renewal terms, influencing your monthly payments and overall financial planning. Here’s what you need to know about the impact of interest rates on your mortgage renewal and how to navigate these changes effectively.

The Role of Interest Rates in Mortgage Renewals

Interest rates are the cost you pay for borrowing money, expressed as a percentage of the total loan amount. They can fluctuate based on economic factors, central bank policies, and market demand. When it’s time to renew your mortgage, the interest rate you’re offered can be higher or lower than what you were previously paying, depending on these factors.

How Rates Affect Your Payments

  • Higher Interest Rates: If rates have gone up since your last term, you may face higher monthly payments. This could impact your monthly budget and long-term financial goals.
  • Lower Interest Rates: Conversely, if rates have decreased, you might see lower monthly payments, providing an opportunity to save money or pay down your mortgage faster.

Strategies for Mitigating the Impact of Rising Rates

Lock in Rates Early

If you anticipate that rates will rise, consider locking in a new rate before your current term ends. Some lenders offer the option to secure a rate several months in advance of your renewal date.

Extend Your Amortization Period

Increasing your amortization period can lower your monthly payments, making them more manageable even if interest rates rise. However, this means you’ll be paying off your mortgage over a longer period, potentially increasing the total interest paid over the life of your loan.

Switch to a Fixed Rate

If you’re currently on a variable-rate mortgage and are concerned about rising rates, switching to a fixed-rate mortgage at renewal time can offer stability and predictability in your payments.

Shopping Around and Negotiating

Don’t accept the first renewal offer from your current lender without shopping around. Other lenders might offer more competitive rates, and even the threat of switching can be a powerful negotiation tool to secure a better rate from your current lender.

The Importance of Professional Advice

Navigating interest rate changes and their impact on your mortgage renewal can be complex. Consulting with a mortgage broker or financial advisor can provide personalized advice, helping you make informed decisions that align with your financial goals.


Understanding the impact of interest rates on your mortgage renewal is crucial for any homeowner in London, Ontario. By staying informed, exploring your options, and employing strategic planning, you can navigate your mortgage renewal process with confidence, ensuring your financial wellbeing in the face of changing rates.