Guides William Lyon August 12, 2023 0 Comments

How Early Can I Renew My TD Mortgage?

If you have a mortgage with TD Canada Trust, you may be wondering how early you can renew your mortgage before it comes due. While lenders like TD want to keep you as a customer, there are still rules and limitations around renewing mortgages early. This article will examine those guidelines so you understand your options when it comes time to renew your TD mortgage.

When Can I Renew My Mortgage with TD?

Most mortgages are set up with a specific term, such as 5 years. At the end of that term, your mortgage contract ends and you have to renew if you want to keep the same mortgage.

TD allows you to renew your mortgage early, but within certain time frames:

If you have a closed mortgage, you can renew up to 90 days before the maturity date.
If you have an open mortgage, you can renew up to 90 days before the next payment due date after the renewal.

So in practical terms, if you have a 5-year closed mortgage with TD maturing on July 1st, 2025, the earliest you could renew is April 1st, 2025.

This 90-day early renewal window is an industry standard that applies to mortgages from most major lenders. It gives you time to review renewal terms and make arrangements, without renewing too far in advance.

Why Would I Want to Renew My Mortgage Early?

There are a few key reasons you may want to renew your mortgage before your term is up:

To lock in lower interest rates – If rates are dropping, you can renew early to secure a lower rate and reduce your payments. Rates fluctuate often, so it pays to monitor rate trends.
Skip mortgage penalties – Renewing early avoids mortgage discharge/break fees if you want to switch lenders at maturity. As long as you renew with TD, there are no penalties.
Shorten amortization period – Renewing early allows you to shorten your remaining amortization which saves on interest costs over the life of the mortgage.
Change mortgage terms – You may want to switch from a variable to a fixed rate mortgage, change your payment schedule or amortization period. Renewing early allows these changes.

Are There Risks or Downsides to Early Renewal?

While early renewal has benefits, there are some aspects to consider:

Interest rates could drop further – Once you renew, you are locked into your new rate. If rates fall lower after you renew, you lose the chance to get that lower rate.
Renewal fees apply – Most lenders charge a fee to renew your mortgage early. With TD, it is $50 for a personal mortgage.
Prepayment penalties reset – Any prepayment penalties on your mortgage will reset when you renew early. This limits your flexibility if you later want to prepay part of your mortgage, switch lenders, or sell your home.
Term resets – Renewing early means starting a new term, so you lose the flexibility of having a shorter remaining time left on your existing term.

How Do I Apply for Early Mortgage Renewal with TD?

If you decide early renewal with TD makes sense for your situation, here is how to proceed:

Contact TD Mortgage Specialist or visit your nearest TD Canada Trust branch 3-4 months before your target renewal date. This gives time for processing.
Provide updated documentation for income confirmation, home value, ID, etc. This is needed to approve the new mortgage.
Discuss new rate and term options with your Mortgage Specialist. Consider fixed, variable, and special offers.
To renew, you sign a renewal offer with the new rate, term, and other details. Once signed, your renewal is complete.
The new interest rate and term take effect on your renewal date. Everything else stays the same.

Conclusion

While not for everyone, early renewal of your TD mortgage can make sense in many situations. By understanding the applicable guidelines and evaluating your own needs, you can decide if renewing your TD mortgage 3-4 months early is the right choice when your renewal date approaches. Monitoring rate trends and acting in advance provides flexibility to lock in favorable interest rates. Discuss options with a TD Mortgage Specialist as your renewal time nears.

Calculate your monthly payments with our TD Mortgage Calculator now!