Your mortgage is likely your largest financial obligation, yet most Canadians sign the contract and do not think about it again until renewal. A simple annual review can uncover opportunities to save thousands. Use this checklist once a year — ideally on the anniversary of your mortgage or at year-end.
The annual mortgage review checklist
1. Rate check
Compare your current rate to today’s market rates.
| Check | Action |
|---|---|
| What is your current mortgage rate? | Find it on your mortgage statement or online banking |
| What are today’s best 5-year fixed rates? | Check a rate comparison site or ask a broker |
| What are today’s best variable rates? | Compare to your fixed rate |
| Is the difference more than 1.0%? | If yes, calculate whether early renewal or blend-and-extend saves money |
When to act: If market rates are 1.5%+ below your current rate and you have more than 2 years remaining, run the early renewal math. Even if breaking your mortgage has a penalty, the savings may exceed the cost.
2. Prepayment privilege check
Have you used your annual prepayment privileges?
Most Canadian mortgages allow two types of prepayments without penalty:
| Privilege | Typical Allowance | Your Mortgage |
|---|---|---|
| Lump-sum prepayment | 10–20% of original mortgage per year | Check your contract |
| Payment increase | 10–20% increase to regular payment | Check your contract |
| Double-up payment | One extra payment per month | Available with some lenders |
Unused privileges reset each year. If your anniversary is approaching and you have not made a prepayment, this is your last chance for the current year.
Prepayment impact calculator
| Mortgage Balance | Annual Prepayment | Interest Saved (Over Remaining Amortization) | Years Saved |
|---|---|---|---|
| $400,000 | $10,000 | ~$18,000 | ~1.2 years |
| $400,000 | $20,000 | ~$35,000 | ~2.1 years |
| $400,000 | $40,000 | ~$62,000 | ~3.8 years |
| $500,000 | $25,000 | ~$42,000 | ~2.2 years |
| $500,000 | $50,000 | ~$75,000 | ~3.9 years |
Assumes 5% rate, 20 years remaining, monthly payments.
Should you prepay or invest?
| Factor | Prepay Mortgage | Invest Instead |
|---|---|---|
| Guaranteed return | Yes — equals your mortgage rate | No — market returns vary |
| Tax efficiency | No tax benefit (primary residence) | TFSA/RRSP grow tax-sheltered |
| Liquidity | Money is locked in home equity | Investments can be accessed |
| Risk tolerance | Conservative | Moderate to aggressive |
| Mortgage rate vs expected return | Prepay if mortgage rate > expected after-tax investment return | Invest if expected return > mortgage rate |
General rule: If your mortgage rate is above 5% and your TFSA and RRSP are fully contributed, prioritize prepayment. If your mortgage rate is below 4% and you have TFSA room, investing likely wins.
3. Equity position review
How much equity do you have in your home?
$$\text{Equity} = \text{Estimated Home Value} - \text{Mortgage Balance}$$
| Check | How To Find It |
|---|---|
| Mortgage balance | Online banking or latest statement |
| Estimated home value | HouseSigma, Realtor.ca, or a recent comparable sale |
| Equity percentage | Equity ÷ Home Value × 100 |
Why it matters:
| Equity Level | Significance |
|---|---|
| < 20% | Still carrying mortgage default insurance; limited options |
| 20–35% | At renewal, you qualify for conventional (uninsured) rates; HELOC eligible |
| 35–50% | Strong equity position; refinancing options open up |
| 50%+ | Consider whether equity is working hard enough — rental investment, HELOC strategy, or Smith Manoeuvre |
4. Amortization check
Are you on track to be mortgage-free by your target date?
| Check | Action |
|---|---|
| Original amortization | What you signed up for (e.g., 25 years) |
| Remaining amortization | Check your latest statement |
| Target payoff date | When do you want to be mortgage-free? |
| On track? | If remaining amortization is longer than expected, consider payment increases or prepayments |
Common scenario: You started with a 25-year amortization, but after refinancing or extending at renewal, your remaining amortization is actually 27 years. This happens when borrowers renew into a new 5-year term and accidentally extend the amortization instead of keeping the original payoff date.
5. Payment frequency review
Are you on the most efficient payment schedule?
| Current Frequency | Better Option | Impact |
|---|---|---|
| Monthly | Switch to accelerated bi-weekly | Saves ~$60,000 on $500K mortgage, pays off ~3.5 years early |
| Semi-monthly | Switch to accelerated bi-weekly | Saves ~$58,000, pays off ~3.5 years early |
| Regular bi-weekly | Switch to accelerated bi-weekly | Saves ~$58,000 — regular bi-weekly saves almost nothing |
If you are not on accelerated bi-weekly, switching is the single easiest mortgage optimization available.
6. Insurance review
Is your mortgage protection appropriate?
| Insurance Type | Check | Action |
|---|---|---|
| Mortgage life insurance (bank) | Are you paying for bank creditor insurance? | Compare to individual term life — typically 30–50% cheaper |
| Home insurance | Is coverage adequate for rebuild cost? | Review annually; construction costs have risen significantly |
| Title insurance | Do you have it? | One-time purchase at closing — confirm it is in place |
| Mortgage default insurance (CMHC) | Are you still paying it? | It is built into your mortgage — cannot be removed, but it transfers if you port |
Key question: If you are paying $80–$120/month for bank mortgage life insurance, get a quote for individual term life. You could save $40–$60/month for better coverage.
7. Renewal planning
When is your mortgage up for renewal?
| Time Until Renewal | Action |
|---|---|
| 2+ years | Monitor rates casually; focus on prepayments |
| 12–18 months | Start following rate trends; set rate alerts |
| 6–9 months | Get pre-approval quotes from other lenders; ask your broker for projections |
| 4 months (120 days) | Renewal offer arrives — negotiate immediately |
| 2–3 months | Finalize decision; if switching lenders, begin the application |
| 1 month | Sign documents; confirm transition |
Renewal preparation checklist
- Know your current rate and maturity date
- Have competing rate quotes ready before your renewal offer arrives
- Check if switching lenders makes sense (legal fees are often covered by the new lender)
- Decide whether to shorten or maintain your amortization
- Consider switching from fixed to variable (or vice versa) based on the rate environment
- Review your payment frequency choice
8. Tax optimization check
Are you using your mortgage as a tax planning tool?
| Strategy | Who It Benefits | Check |
|---|---|---|
| Smith Manoeuvre | Homeowners with investment interest | Converting non-deductible mortgage interest into tax-deductible investment loan interest |
| Rental property mortgage | Landlords | Mortgage interest on rental properties is tax-deductible — ensure you are claiming it |
| RRSP for Home Buyers’ Plan | First-time buyers with existing mortgage | If you used HBP, are you making required annual repayments? |
| FHSA | First-time buyers saving for a home | If you have not bought yet, are you maximizing FHSA contributions? |
HBP repayment check
If you used the Home Buyers’ Plan, you must repay 1/15th of the withdrawal annually starting the second year after withdrawal. Missing a payment means that amount is added to your taxable income.
| HBP Withdrawal | Annual Required Repayment | Deadline |
|---|---|---|
| $35,000 | $2,333/year | By December 31 each year |
| $60,000 (new 2024 limit) | $4,000/year | By December 31 each year |
9. Property tax review
| Check | Action |
|---|---|
| Is your property tax assessment accurate? | Review the assessed value — appeal if significantly above market value |
| Are you claiming all eligible credits? | Homeowners’ grants (BC), property tax credits (Ontario, Manitoba), seniors’ deferrals |
| Is your municipality planning increases? | Budget projections — factor into your annual housing costs |
10. Emergency preparedness
| Check | Status |
|---|---|
| Could you cover 3–6 months of mortgage payments if you lost your income? | Emergency fund should cover this |
| Do you have disability insurance? | Covers mortgage payments if you cannot work |
| Is your life insurance sufficient? | Should cover full mortgage balance plus living expenses for dependents |
| Do you have a will? | Specifies what happens to the property and mortgage |
Annual review summary template
Copy and fill in once per year:
| Item | Current Status | Action Needed |
|---|---|---|
| Current rate | ___% | |
| Market rate (5-yr fixed) | ___% | |
| Rate gap | ___% | |
| Mortgage balance | $______ | |
| Estimated home value | $______ | |
| Equity | $______ (____%) | |
| Remaining amortization | ___ years | |
| Prepayment used this year | $______ of $______ allowed | |
| Payment frequency | __________ | |
| Renewal date | __________ | |
| Mortgage life insurance | __________ | |
| HBP repayment made | Yes / No / N/A |
When to get professional help
| Situation | Who To Contact |
|---|---|
| Rates have dropped and you want to explore early renewal | Mortgage broker |
| You want to restructure your mortgage (HELOC, refinance, second mortgage) | Mortgage broker + financial advisor |
| Property tax assessment seems too high | Municipal assessment office |
| You want to set up a Smith Manoeuvre | Financial planner with mortgage expertise |
| Your financial situation has changed significantly | Financial planner |
| You are approaching retirement with a mortgage | Financial planner |