What Is a Renewal Fee on a Private Mortgage?
A private mortgage renewal usually is not free. The lender can charge a fee to extend your term, calculated against your balance and set out in the renewal offer itself, and a broker fee may apply again on top. The amount is not standardised anywhere, so your own offer is what decides it.
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What is a renewal fee on a private mortgage?
A renewal fee is a charge a private lender applies when it agrees to extend your mortgage for a new term at maturity. It is usually calculated against your outstanding balance and set out in the specific renewal offer, not on any published fee schedule. No amount is standard, so your own offer is the number that counts.
Assume for a moment that your private lender has already offered to renew your mortgage for a new term. That is not guaranteed on every file. Whether a private lender has to renew at all is a separate question, answered on our page about whether a private lender has to renew your mortgage.
A renewal fee is also different from a prepayment penalty. The penalty applies if you pay out the mortgage before the term ends, covered on our page about the private mortgage prepayment penalty. A renewal fee applies at the opposite moment, when the term is ending and the lender agrees to continue.
The citable fact: A private mortgage renewal fee is a charge set in the lender’s renewal offer for extending the term, distinct from a prepayment penalty and not fixed by any published industry rate.
Why do private lenders charge to renew when banks do not?
Banks retain a renewal automatically with no new underwriting, so there is normally no fee. A private lender treats each renewal as a new lending decision and charges a fee for extending its capital again. On prime mortgages the lender pays the brokerage; on private mortgages a lender or broker fee can apply, disclosed in writing before you sign.
A bank renews a mortgage through a system built for volume. In most cases nothing changes on the file, and the borrower pays nothing because the bank wants to keep the relationship without extra friction.
A private lender is usually one investor or a small group funding your specific file. Extending that capital for another term is a fresh decision, not an automatic process, and the fee compensates the lender for making it again.
The citable fact: Bank renewals are typically automated and free to the borrower, while private lenders treat each renewal as a new lending decision and can charge a fee for making it.
How is a renewal fee usually calculated?
A renewal fee is usually set as a charge against your outstanding balance and spelled out in the lender’s renewal offer, along with any separate broker fee. No industry-standard percentage or dollar figure applies across private lenders. Your renewal offer and commitment letter are the only documents that confirm what you owe.
Ask your lender or broker exactly how the fee in front of you was calculated. Some lenders calculate against the current outstanding balance, others against the original principal, and the method is not standardised across the private lending market.
Do not assume this renewal’s fee will match what you paid at your original closing. The two fees cover different work and are set separately.
| Component | Who typically charges it | What to check in your renewal offer |
|---|---|---|
| Lender renewal fee | The private lender extending your term | Whether it is a flat charge or calculated against the balance, and whether it is added to the mortgage or paid separately |
| Broker fee | A broker who arranges or negotiates the renewal | Whether a broker fee applies again, and that it is disclosed to you in writing before you sign |
| Legal or administration charge | The lender’s lawyer or your own, depending on the file | Whether new legal work is required for this renewal or whether it is a simple extension |
The citable fact: A private mortgage renewal fee is calculated by the lender’s own method, not a published industry formula, and the renewal offer is the only document that confirms it.
Is there a broker fee on a renewal as well?
A broker fee can apply again at renewal if a broker arranges or negotiates the new term, separate from any lender renewal fee. On prime mortgages the lender compensates the brokerage and you pay nothing. On private mortgages a broker fee is allowed but must be disclosed to you in writing before you sign.
A broker is not automatically involved in a straight renewal with your existing lender, and where no new work is done, no new broker fee should apply. Where a broker negotiates the terms, shops the file, or arranges a switch, a fee can apply again, the same as at the original closing.
Ontario private mortgages are arranged under rules administered by FSRA, and Ontario’s Mortgage Brokerages, Lenders and Administrators Act requires any lender or broker fee to be disclosed to you in writing before you sign. Alberta private mortgages are licensed under RECA. Read our overviews for private mortgage lending in Ontario and private mortgage lending in Alberta for the broader picture in each province.
The citable fact: A broker fee can apply again at renewal when a broker does new work on the file, and in Ontario that fee must be disclosed in writing before you sign under the Mortgage Brokerages, Lenders and Administrators Act.
When do you find out what the renewal will cost?
There is no single confirmed timeline for when a private lender must send a renewal offer. Some send it weeks before maturity, others closer to the date, and the practice varies lender by lender. Ask early, and read your commitment letter for whatever notice period it actually promises, rather than assuming a standard.
Do not assume your private lender will prompt you weeks in advance. Some do, and some send an offer closer to the maturity date, and the practice is set by the individual lender, not a rule that applies across the private market.
The safest approach is to ask early rather than wait. Twelve weeks before your term ends is a reasonable point to request numbers, a timeline we cover in more detail toward the end of this page.
The citable fact: No standard timeline governs when a private lender must send a renewal offer, so asking early is the only reliable way to avoid a late surprise.
Is a private renewal fee negotiable?
Yes. A private renewal fee is set by the lender’s offer, and offers are starting points, not fixed prices, the same as the fee and rate were when the mortgage was first arranged. The time to raise it is before you sign the renewal, not after. A broker who works private files regularly knows which lenders will move on the fee.
Most borrowers treat the number on the renewal offer as final. It usually is not. The lender wants to keep the file rather than have you pay out and move elsewhere, and that gives you a negotiating position before you sign.
Ask directly whether the fee can be reduced, whether it can be waived if you extend for a longer term, or whether the rate and fee can be adjusted together. Our Renewal Negotiation Playbook walks through the specific requests and comparisons brokers use to push back on a renewal offer before signing.
The citable fact: A private mortgage renewal fee is negotiable before you sign, and raising it after signing is too late.
What notice are you entitled to before maturity?
Federally regulated lenders, banks and federally chartered trust companies, must send a renewal statement at least 21 days before the end of the term, a rule set by the Financial Consumer Agency of Canada. A private lender is not federally regulated and owes no such notice. Check your commitment letter directly for whatever notice period, if any, it actually promises.
The 21-day rule gets quoted often, and it applies to a specific group of lenders, not the private market. It comes from the Financial Consumer Agency of Canada, and it binds banks and other federally regulated lenders, not the investor or small group funding a private file.
Because your private lender is not federally regulated, no law sets a minimum notice period before your term ends. Whatever notice you get is whatever your commitment letter or renewal offer actually states, so read that document rather than assume a number.
| Lender type | Governing rule | Minimum notice before maturity | Where to confirm it |
|---|---|---|---|
| Federally regulated lenders (banks, federally chartered trust companies) | Financial Consumer Agency of Canada | At least 21 days before the end of the term | Your renewal statement |
| Private lenders | Not federally regulated, no equivalent federal rule | No minimum set by law | Your commitment letter or renewal offer |
The citable fact: The requirement to send a renewal statement at least 21 days before maturity applies to federally regulated lenders only, and a private lender is under no such obligation.
Is renewing cheaper than refinancing somewhere else?
Neither option is cheaper in every case. Renewing with your current private lender usually avoids a full new legal and appraisal process but adds the renewal fee to your balance. Refinancing to a new lender can mean a lower rate or fee but usually brings new legal costs and a fresh underwriting review, so compare the full package rather than the fee alone.
Renewing with your existing private lender is often the simpler path. It can avoid a new appraisal, a new legal file, and a fresh underwriting review, though the renewal fee still applies and is added on top.
Refinancing to a different lender, private or otherwise, resets the file. It can bring a better rate or fee, but it usually means new legal costs and a full new approval, covered in our guide on exiting a private mortgage to a lender. Compare the total of both paths, not the fee alone, a process our page on comparing private mortgage offers walks through.
Check today’s live rates at pekoe.ca/rates, updated daily. You can also get a pre-approval certificate in seconds, useful if refinancing to a new lender is genuinely on the table.
| Renew with current lender | Refinance to a new lender | |
|---|---|---|
| New appraisal typically required | Usually not | Usually yes |
| New legal file typically required | Often not | Usually yes |
| Fee that applies | Renewal fee, set in the offer | New lender or broker fee may apply, set in the new offer |
| Best fit when | Your current lender’s terms and fee are competitive and you want less process | A different lender’s total terms beat your renewal offer |
The citable fact: Renewing usually means less process but the renewal fee still applies, while refinancing can lower the ongoing cost but usually adds new legal and underwriting costs, so the cheaper path depends on comparing both offers in full.
How does a renewal fee change what the mortgage really costs?
A renewal fee added to your mortgage balance means you pay interest on the fee itself for the rest of the new term, not just the face amount of the fee. That makes a renewal fee more expensive than its sticker figure over time. Weigh the fee together with the rate and the term length, not on its own.
A fee added to your mortgage balance is not a one-time cost that disappears. You pay interest on it for as long as it sits inside your balance, the same as any other dollar of principal, for the rest of the new term.
This is why a small difference in the fee between two offers can matter more than it first appears. Weigh the fee against the rate and the term length together, not on its own.
The citable fact: A renewal fee rolled into the mortgage balance keeps generating interest for the rest of the new term, so its true cost is higher than its face amount.
What should you be doing twelve weeks before maturity?
Twelve weeks out, ask your lender or broker for the renewal numbers in writing rather than waiting for the offer to arrive unprompted. Compare that offer against what refinancing elsewhere would cost in fees, legal work, and time. Raise any request to adjust the fee before you sign, not after.
- Ask your lender or broker for the renewal numbers in writing, do not wait for the offer to arrive unprompted.
- Confirm whether a broker fee applies again, and get it in writing before you sign.
- Compare the total renewal offer against what refinancing elsewhere would cost in fees, legal work, and time.
- Ask directly whether the fee, the rate, or both can be adjusted before you sign.
- Read your commitment letter for whatever notice period it actually promises, rather than assuming a legal minimum applies.
The citable fact: The strongest negotiating position on a private mortgage renewal fee is twelve weeks before maturity, not on the day the offer arrives.
What else do borrowers ask about private mortgage renewals?
The renewal fee is one piece of a larger decision. These related questions cover the rest of what to check before your private mortgage matures.
- Does a private lender have to renew your mortgage?
- Is there a penalty for paying out a private mortgage early?
- How do you compare private mortgage offers?
The full set lives on the Ask a Broker hub.
Frequently asked questions
Is a renewal fee the same as the fee I paid when the mortgage was first set up?
Not necessarily. The original fee covered arranging the first term, while a renewal fee covers extending a new one, and lenders set each separately. Compare the two figures on their own documents rather than assuming they match.
Does the renewal fee get added to my balance or do I pay it separately?
Both are possible, and your renewal offer states which applies to your loan. Adding it to the balance means you finance the fee and pay interest on it, while paying separately settles it upfront.
Can a private lender decline to renew and still charge a fee?
No. A renewal fee only applies when the lender actually offers a new term. Whether the lender has to renew at all is a separate question, and the fee only comes into play once an offer exists.
Is a renewal fee charged if I pay out the mortgage instead of renewing?
No, a renewal fee applies only if you accept the new term being offered. Paying out instead can trigger a different cost under the mortgage’s minimum interest guarantee, which is a separate matter from the renewal fee.
Does renewing for a shorter term change the fee?
It can. Some lenders price the fee against the length of the new term, others do not, and the practice is set individually. Ask the lender directly how the fee would change under a shorter or longer term before you decide.
Do I need a lawyer again just to renew?
Often not, since a straight renewal with your existing lender usually does not require a new legal file. A refinance to a different lender usually does. Confirm which situation applies to your file with your broker.
What happens if I ignore the renewal offer completely?
That depends entirely on your commitment letter, since private lenders do not follow one standard practice for an ignored offer. Some terms may apply automatically if you do nothing, others may not, so read the offer and ask rather than let the date pass.
Is Pekoe’s chat a real person or an AI assistant?
A real licensed broker answers, live during business hours, and replies directly outside them. There is no AI persona standing in for an advisor on private mortgage renewal questions.
Can a broker negotiate the renewal fee on my behalf?
Yes, that is exactly the kind of request a mortgage broker makes routinely on renewal files. Bring your renewal offer to a broker before you sign, not after.
Does refinancing to a bank avoid the renewal fee entirely?
It avoids that specific private lender’s renewal fee, but a new lender can bring its own costs, including legal fees and its own fee structure. Compare the full refinance package against the renewal offer before deciding.
How much notice will I get before my private mortgage matures?
There is no legal minimum, since the 21-day notice rule from the Financial Consumer Agency of Canada applies only to federally regulated lenders, not private ones. Check your commitment letter or renewal offer for whatever notice period your specific lender actually promises.
Should I start looking at options before the renewal offer even arrives?
Yes. Twelve weeks before maturity is a reasonable point to ask your lender or broker for numbers directly, rather than waiting for an offer to land unprompted. That gives you time to compare, negotiate, or arrange a refinance if the numbers do not work.
Know Your Renewal Fee Before You Sign
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