Your renewal letter, decoded: 7 things to check before you sign

1. Check the balance at renewal. Match the proposed principal with your lender's projected balance at maturity, not an old annual statement. Ask about unpaid amounts, charges, recent lump sums or adjustments that might explain a difference. If you want to make a lump-sum payment, confirm the permitted amount and timing first.

2. Check the payment and its frequency. Is it monthly, semi-monthly, biweekly or accelerated? Ask whether the quoted amount is principal and interest only or also includes property tax or other charges. Compare like with like; a payment drawn more frequently cannot be judged just by its size.

Confirm the first withdrawal date and how the final payment under the old term is handled. If the lender collects property tax, check that arrangement separately so you do not mistake a tax adjustment for a change in the mortgage cost.

3. Check the term length. This is how long the new contract runs, not how long it takes to repay the mortgage. Consider whether you may move, separate, retire or need different financing during that period. Ask about the implications of ending the term early rather than choosing based on the payment alone.

4. Check the remaining amortization. This is the modelled repayment period. Ask whether the offer keeps your existing schedule or extends it. FCAC cautions that extending amortization to lower payments increases interest costs over time. If two offers use different amortizations, request a matched comparison before calling one cheaper.

The combination matters. A manageable payment with a longer repayment period may be a deliberate affordability choice, but you should understand that trade-off. Ask which changes require a new assessment and what conditions must be met.

Ask whether the offer is fixed or variable and how the payment works. With a variable product, clarify whether the payment adjusts as the rate changes or whether the payment can stay fixed while the principal-and-interest split changes. Ask what circumstances could require a payment increase or another action.

If considering fixed, ask what payment certainty covers and which costs can still change. For either type, request an explanation of the early-exit calculation and what happens if you sell or need to refinance. These are contract questions, not a reason to guess the next rate move.

Ask whether a variable product can be converted to fixed, which terms would be available and how the conversion offer would be determined. Do not assume conversion means access to any advertised offer. Choose with your budget resilience and plans in mind.

6. Check fees and features. Look for renewal charges, any cash-back conditions, prepayment privileges and portability terms. If you may switch, compare the transfer costs separately. Ask whether features you used in the old term carry forward; do not rely on the product name.

7. Check acceptance and default instructions. Find the offer expiry, required signature method and what happens if you do nothing. If automatic renewal applies under your agreement, ask which term and conditions it uses. Do not assume silence keeps the current arrangement indefinitely.

Keep the full accepted agreement, not only the first page with the payment. Ask for written confirmation that the acceptance was received and for a clear list of any remaining conditions.

For a mortgage with a federally regulated financial institution, FCAC says the lender must provide a renewal statement at least 21 days before the existing term ends. It must also give at least 21 days' notice if it will not renew. Confirm the rules applicable to your lender rather than extending this requirement to every provider.

FCAC lists the balance at renewal, interest rate, payment frequency, term and applicable charges or fees as required statement information. The statement must also specify that the offered interest rate will not increase until your renewal date. That does not mean every other contractual question is answered on the first page.

If something is missing or confusing, contact the lender promptly. A broker can help compare options, but a switch still needs approval and completion. Leave enough time to act on the answers rather than signing because the envelope arrived late.