Renewing your mortgage can feel like learning a whole new language.

Between refinancing, amortization, interest rates and payment schedules, there’s a lot to wrap your head around — especially if you’re facing higher monthly payments.

But understanding your options doesn’t have to be complicated.

Whether you’re renewing for the first time or looking for ways to manage your mortgage payments, use this breakdown of the key terms you’ll likely come across, so you can focus on preparing your finances when renewal time rolls around. If you’re curious to learn about tips from experts ahead of your mortgage renewal, check out this guide.

Check the list of terms below and click on each one to do to the definition

• Mortgage renewal
• Straight renewal
• Switch or transfer
• Refinancing
• Early renewal or renegotiation
• Blend-and-extend
• Debt-consolidation refinance
• Amortization extension
• Temporary payment relief
• Mortgage term
• Amortization period
• Fixed interest rate
• Variable interest rate
• Mortgage principal
• Payment frequency

Mortgage renewal

When your mortgage term ends, you either pay off the remaining balance or sign a new contract for the next term. Most Canadians renew several times before fully repaying their mortgage. The most common options are renewal for three and five years.

Straight renewal

This means renewing your existing mortgage balance‌ with the same lender, without borrowing more or ‌changing the loan. The interest rate, term and payment may still change.

Switch or transfer

Switch or transfer means moving your mortgage to a different lender, often for the same remaining balance at the end of a term. The new lender must approve your application.

Refinancing

Refinancing is replacing or changing a mortgage to alter the loan. This could involve borrowing more, consolidating debt, accessing home equity or changing key terms.

Early renewal or renegotiation

This means changing your mortgage with your current lender before the existing term ends. This can include switching from a variable to a fixed rate or accepting a new rate and term early.

Blend-and-extend

Some lenders allow you to combine your existing interest rate with a current rate and extend your mortgage term. The Financial Consumer Agency of Canada (FCAC) recognizes this arrangement as an early renewal option.

Debt-consolidation refinance

This means refinancing your mortgage to combine high-interest debts, such as credit cards, car loans or lines of credit, into your mortgage.

Amortization extension

Amortization extension means lengthening the estimated time needed to repay your mortgage. For example, you can extend a remaining amortization of 20 or 25 years to a longer period.

Temporary payment relief

Lender-specific measures may include payment deferrals, skipped payments, temporary payment reductions, interest-only periods or adding missed payments to your mortgage balance.

Mortgage term

This is the length of your current mortgage contract, often five years.

Amortization period

The estimated total time it will take to repay your mortgage in full, based on your payment schedule and interest rate. It’s usually much longer than the mortgage term.

Fixed interest rate

A fixed interest rate remains the same throughout the mortgage term.

Variable interest rate

A variable interest rate can change during the term, usually in response to changes in the lender’s prime rate.

Mortgage principal

A mortgage principal is the original amount borrowed. Your remaining principal balance is the amount you still owe at renewal.

Payment frequency

This is how often you make mortgage payments, whether monthly, semi-monthly, biweekly or weekly.