Renewing and Refinancing Private Mortgages in Canada
May 3, 2025 | Posted by: Alex Vinarski
What Happens When Your Private Mortgage Term Ends?
Private mortgages usually have short terms—6 months to 2 year. At the end of the term, you’ll need to either:
- Renew the Mortgage with the same lender.
- Refinance with a more affordable lender or switch to a traditional bank mortgage if your situation has improved.
Challenges of Renewing a Private Mortgage
While some borrowers may prefer to renew their private mortgage, it’s essential to be cautious. Even though interest rates are declining, many private lenders are increasing rates at renewal or adding high renewal fees.
- High Renewal Fees: Lenders may charge large fees at renewal, making it more expensive to stay with the same lender.
- Rising Rates Despite Market Trends: Some private lenders raise rates, even if the broader market sees a rate drop.
- A New Mortgage Might Be Cheaper: In some cases, it’s more affordable to refinance with a new lender rather than renewing the existing mortgage. I can help you compare renewal and refinancing options to find the most cost-effective solution.
When Should You Renew a Private Mortgage?
If you need more time to stabilize your financial situation, renewing may be the simplest option.
- Flexibility with Open Mortgage Terms: Some lenders offer open mortgages, which can be paid off any time without penalty.
- Time to Repair Credit: Renewing your private mortgage gives you more time to rebuild your credit and improve your financial standing for future refinancing.
When is Refinancing the Better Option?
Refinancing can help you move to a more affordable option and save money over time.
- Refinance with a Bank or B Lender: If your credit and income have improved, switching to a lender with lower rates is ideal.
- Avoid High Renewal Fees: If your current lender charges excessive renewal fees, refinancing can be a cheaper alternative.
- Tap into Home Equity: Refinancing allows you to access home equity to pay down high-interest debt or fund projects like renovations.
- Lower Private Mortgage Rates: I can help you find private lenders offering better terms, which may reduce your overall costs. Best rates right now 5.99% for 1st mortgage, and 9.99% for second mortgage.
How a Mortgage Broker Can Help with Renewals and Refinancing
Managing private mortgages can be complex, but as a professional mortgage broker, I simplify the process by:
- Comparing Renewal Offers: I help negotiate with lenders to get you the best renewal terms and rates.
- Finding Better Refinancing Options: If a new mortgage is more cost-effective, I’ll guide you through the refinancing process.
- Accessing Private Lenders: I work with private lenders who can approve financing fast, often in just 5 days, even without income verification.
- Exploring Alternative Lending Programs: If banks still aren’t an option, I can connect you with B lenders with stated income programs ( no tax return required).
Conclusion: Plan Ahead to Save Money
Whether you choose to renew or refinance, planning ahead is crucial to avoid unnecessary fees and secure the best rates. Some lenders raise rates or charge hefty fees at renewal, making it more cost-effective to switch lenders. With my help, we’ll review your options and find the financing solution that best fits your needs.
If your mortgage term is coming to an end, don’t wait—contact Alex Vinarski, Vancouver Mortgage Broker and private lender today. I’ll help you explore all your options to make sure you get the best deal possible.
