1. What is a Mortgage Renewal Calculator Canada?

Definition: This calculator determines your new monthly mortgage payment when renewing your mortgage in Canada.

Purpose: Helps homeowners estimate their new payments when renewing at different interest rates or term lengths.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

• \( M_{new} \) — New monthly payment (CAD)
• \( P_{remaining} \) — Remaining principal balance (CAD)
• \( r_{new} \) — New monthly interest rate (decimal)
• \( n_{new} \) — New number of payments (months)

Explanation: The formula calculates the fixed payment needed to fully amortize the remaining balance over the new term.

3. Importance of Renewal Calculations

Details: Mortgage renewals in Canada typically occur every 5 years. Understanding your new payment helps with budgeting and comparing lender offers.

4. Using the Calculator

Tips: Enter your remaining principal, proposed new interest rate (default 5%), and new term length (default 25 years). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: How often do Canadians renew mortgages?
A: Typically every 5 years, though terms of 1-10 years are available.

Q2: Does this include property taxes or insurance?
A: No, this calculates principal and interest only. Add approximately 20-30% for a complete payment estimate.

Q3: What's a good renewal rate in Canada?
A: As of 2023, rates typically range from 4.5% to 6.5% for 5-year fixed terms.

Q4: Can I change my amortization period at renewal?
A: Yes, you can often reset to a new 25-30 year amortization, which would lower payments but increase total interest.

Q5: Should I shop around at renewal?
A: Absolutely! Comparing rates from multiple lenders can save thousands over your term.