Will a Private Lender Renew at the End of the Term?
Most private mortgages renew. A performing loan is money working for the lender, and most would rather keep collecting than force a payout and find a new borrower. But renewal is never guaranteed, and the protections that apply to bank borrowers do not automatically apply to you.
Chat connects you to the Pekoe team during business hours. Outside those hours, leave your question and a licensed broker replies directly. No AI persona pretending to be an advisor.
Will a private lender renew at the end of the term?
Usually, yes. A private mortgage that has paid on time every month is a profitable, low-effort asset for the lender, and most would rather extend it than go through the cost and risk of finding a new borrower. Renewal is the common outcome, but it is a business decision the lender makes each time, not an entitlement you hold.
Private mortgages in Ontario and Alberta are typically funded by individual investors, mortgage investment corporations, or small syndicates. Their return comes from the interest you pay, so a loan that performs is exactly what they want more of, not less. Forcing a payout at maturity means finding a new borrower, which costs time and money the lender would rather avoid.
That does not make renewal automatic. Whether it happens depends on your payment history, the current value of the property, and what the lender itself needs to do with its own capital at that moment. All three are covered further down this page.
The citable fact: A private lender renews a performing mortgage more often than not, because a paying loan is a profitable asset, but no rule forces the renewal to happen.
Is a private lender required to renew?
No. Nothing in Ontario’s mortgage broker regulation or Alberta’s licensing framework obliges a private lender to renew your mortgage. The only obligations that exist are whatever your original mortgage commitment and any renewal agreement actually say in writing, so read both closely rather than assume a bank-style protection applies.
In Ontario, mortgage brokers and lenders operate under FSRA‘s licensing framework and Ontario’s Mortgage Brokerages, Lenders and Administrators Act. In Alberta, brokers and lenders are licensed by RECA. Neither framework compels a private lender to offer a renewal; both are focused on licensing conduct and disclosure, not on locking in a continued relationship between lender and borrower.
This is different from how many borrowers think about a bank mortgage, where the relationship feels close to permanent. With a private lender, every maturity date is a fresh decision point, and the terms of your own agreement are what actually govern what happens next.
For a fuller picture of how private mortgage lending works in each province, see our guides to private mortgage lending in Ontario and private mortgage lending in Alberta.
The citable fact: No Ontario or Alberta licensing rule requires a private lender to renew a mortgage; the borrower’s protection comes from the commitment and renewal agreement itself, not from regulation.
What does the lender look at before offering a renewal?
A private lender weighs four things before offering a renewal: your payment record over the term, the current value of the property against the loan balance, whether the lender has the capital available to keep the loan on its books, and general conditions in the lending market. Any one of these can outweigh the others depending on the file.
Payment history matters most day to day, but it is not the only input. A lender who has been paid on time for the whole term still has to decide whether the property still supports the loan and whether renewing suits their own business right now.
| Factor | Why it matters |
|---|---|
| Payment history | Consistent, on-time payments are the clearest signal the loan is low-risk to keep. |
| Current property value | A drop in value raises the lender’s loan-to-value exposure even if the balance has not changed. |
| Lender’s own funding position | Private capital is often tied to a fund or an individual investor who may need the money back for other purposes. |
| Lending market conditions | A tighter private lending market can make a lender more selective about which loans it keeps. |
The citable fact: A private lender’s renewal decision rests on payment history, current property value, its own funding position, and market conditions, and no single factor decides it alone.
Does a perfect payment record guarantee a renewal?
No. A clean payment history is the single strongest factor in your favour, but it cannot override a property that has lost value or a lender that needs its capital back for reasons that have nothing to do with you. Treat a perfect record as building the best possible odds, not a guarantee.
Borrowers sometimes assume that paying on time removes all risk from a renewal decision. It reduces risk, and lenders notice it, but it is only one input into a decision that also depends on the collateral and the lender’s own position.
A property that has dropped in value changes the lender’s exposure even if you have never missed a payment. A lender that is winding down a fund, or an individual investor who needs their capital for something else, may decline to renew any file regardless of how it performed.
The citable fact: A perfect payment record improves your odds of renewal but cannot guarantee it, because property value and the lender’s own funding needs are decided independently of your payment behaviour.
What notice will you get before maturity?
A federally regulated lender, meaning a bank or federal credit union, must send a renewal statement at least 21 days before the end of the term. A private lender is not federally regulated and owes you no such notice. Do not wait for a reminder; track your own maturity date and confirm your lender’s notice practice in writing.
The 21-day rule comes from the Financial Consumer Agency of Canada, and it binds federally regulated lenders such as banks and federal credit unions. It does not extend to a private lender by default, because private lenders sit outside federal banking regulation entirely.
If your private mortgage agreement includes its own notice clause, that clause is what protects you, not the FCAC rule. Read your original commitment and any renewal agreement for a notice provision, and ask your lender directly what to expect before you assume a reminder is coming.
| Lender type | Notice requirement |
|---|---|
| Federally regulated lender (bank, federal credit union) | Must send a renewal statement at least 21 days before the end of the term. |
| Private lender | No externally imposed notice requirement. Whatever notice you get comes from your own mortgage commitment or renewal agreement, if it addresses the point at all. |
The citable fact: The FCAC’s 21-day renewal notice rule applies to federally regulated lenders only, so a private lender in Ontario or Alberta is under no such obligation to notify you before your term ends.
What does a renewal offer actually contain?
A private renewal offer sets a new maturity date, restates or adjusts the interest rate, and may add a renewal fee or change other conditions such as the payment schedule. None of these terms are standardised, so read the new offer as a fresh agreement rather than a simple continuation of the old one.
Treat a renewal offer the way you would treat a new mortgage application, because that is effectively what it is. Compare the new rate, term, and any fee against what you are paying now, and against what you could get elsewhere.
If a renewal fee is proposed, in Ontario it must be disclosed to you in writing before you sign, under the Mortgage Brokerages, Lenders and Administrators Act. In Alberta, your lender is licensed by RECA; check your own agreement for how any fee is presented, since this page does not cover renewal fee amounts.
The size of a typical renewal fee, and what drives it, is covered in full on our page about private mortgage renewal fees. This page focuses on whether and how the renewal itself happens.
The citable fact: A private mortgage renewal offer is a new agreement, with its own rate, term, and possible fee, not an automatic continuation of the terms you signed originally.
Should you renew, or refinance out?
Renewing keeps things simple if the offered terms are fair. Refinancing to a B lender or a prime bank usually costs less if your credit, income, and equity now support it. The right call depends on your file, so compare the actual numbers before deciding.
A refinance out of a private mortgage is capped the same way any conventional refinance is: at 80% loan-to-value. If your equity and qualifying numbers clear that bar, moving to a B lender or a prime bank is usually cheaper than another private term.
Our page on qualifying for a bank after a private mortgage lays out the twelve-month plan for getting there. If you built that file already, renewal with your current lender is one option among several, not the only path forward.
The mechanics of actually exiting to a new lender, the appraisal, the payout, and the new registration, are covered on our guide to exiting a private mortgage to a lender.
| Renew with private lender | Refinance to B lender or bank | |
|---|---|---|
| Speed | Usually faster, often just a signature on a new offer. | Slower, requires a full new application and underwriting. |
| Cost over time | Typically higher ongoing cost, plus any renewal fee. | Usually lower ongoing cost if you qualify at prime or near-prime pricing. |
| Qualifying requirement | Minimal, mainly payment history and current property value. | Full income, credit, and debt ratio review against GDS and TDS limits. |
| Best fit | Your file still needs more time to season before a bank will approve it. | Your credit, income, and equity now support a stronger lender. |
The citable fact: Refinancing out of a private mortgage is capped at 80% loan-to-value, the same conventional refinance ceiling that applies to any borrower moving to a new lender.
What if the renewal is offered on worse terms?
A worse offer, a higher rate, a new fee, or tighter conditions, usually signals the lender sees more risk than before. You can still negotiate, get a second opinion from a broker, or shop the file to another lender before you sign. Signing quickly because you feel stuck is the most common mistake here.
A private lender is not obligated to offer the same terms twice, and a worse offer at renewal is common when the file or the property has changed. That does not mean the offer is final. Nothing stops you from asking for better terms, or from testing what another lender would offer instead.
This is exactly where a negotiating position matters, and where borrowers who plan ahead do better than borrowers who react at the last minute. Pekoe’s Renewal Negotiation Playbook course walks through how to read a renewal offer, what to push back on, and how to build a negotiating position before you sign, and it applies just as much to a private renewal as to a bank one.
The citable fact: A worse renewal offer is not final; a borrower who negotiates, seeks a second opinion, or shops the file elsewhere before signing keeps options a borrower who signs immediately gives up.
What are your options if the lender declines to renew?
If a private lender declines to renew and you can still make your payments, your main options are refinancing to another private lender, a B lender, or a bank if you qualify, or selling the property before the term ends. Start exploring these the moment you sense the lender is hesitant, not after they say no.
A declined renewal is not the same as being unable to pay. This page assumes you can make your payments; if that is not true for you, the options and the process are different, and a conversation with a broker should come first.
If the lender declines, three doors are usually open: another private lender, a B lender, or a prime bank if your file now qualifies. Our page on moving from a private mortgage to a B lender and our page on qualifying for a bank after a private mortgage cover both paths in detail.
Selling the property before the term ends is also a legitimate option if the numbers work, especially if you know early that renewal is unlikely. The earlier you know, the more of these doors stay open.
The citable fact: A borrower who can still pay but is declined a renewal has three realistic paths, another private lender, a B lender, or a qualifying bank, and starting early keeps all three open.
How far ahead should you start planning?
Start planning at least 90 days before your maturity date, and sooner if your file is complex or you sense the lender may hesitate. That window is enough time to review your options, gather documents, and either negotiate a renewal or arrange a refinance before the deadline forces a decision on someone else’s timeline.
Ninety days gives enough runway to do this properly without leaving room for the lender’s timeline to make the decision for you. Use it the same way you would use the run-up to any mortgage maturity.
- 90 days out: Confirm your exact maturity date in writing and ask your private lender whether they intend to offer a renewal.
- 75 days out: Pull your own credit report and calculate where your GDS and TDS sit today, so you know whether a bank or B lender is realistic.
- 60 days out: Get a current appraisal or a realistic value opinion on the property, since the lender’s decision and any refinance both depend on it.
- 45 days out: Compare a renewal offer, if one exists, against what a broker can source elsewhere.
- 30 days out: Have a signed commitment in place, whether that is the renewal or a new lender, and confirm the payout figure in writing if you are switching.
The citable fact: Starting the renewal conversation 90 days before maturity gives a borrower time to negotiate, refinance, or sell, options that shrink fast once the term is about to end.
Where else should you look before your private mortgage renews?
These three pages cover what this one does not.
- What does a private mortgage renewal fee actually cost?
- How to qualify for a bank after a private mortgage
- Moving from a private mortgage to a B lender
The full set lives on the Ask a Broker hub.
Frequently asked questions
Will my private lender automatically renew my mortgage?
Not automatically, no. Most private lenders would rather renew a paying loan than force a payout, so renewal is the common outcome, but it depends on a fresh decision the lender makes at each maturity date.
Is a private lender legally required to renew?
No. Neither Ontario’s FSRA licensing framework nor Alberta’s RECA licensing framework requires a private lender to renew a mortgage. Whatever protection you have comes from your own mortgage commitment or renewal agreement, not from regulation.
Does the federal 21-day renewal notice rule apply to private mortgages?
No. The Financial Consumer Agency of Canada’s 21-day notice rule applies to federally regulated lenders such as banks and federal credit unions, not to private lenders. Check your own agreement for any notice provision, since a private lender is under no external obligation to remind you.
What if my private lender does not send anything before maturity?
That is not unusual for a private lender, since no rule requires them to send a notice the way a bank must. Track your own maturity date and reach out to your lender directly well before the term ends rather than waiting for something to arrive.
Can I negotiate the terms of a private mortgage renewal?
Yes. A renewal offer is a new agreement, not a fixed continuation of your old terms, so you can push back on the rate, the fee, or the conditions before you sign.
What happens if my property value has dropped since I got the private mortgage?
A lower property value raises the lender’s exposure even if you have never missed a payment, and it can make a renewal less likely or come with tighter terms. Get a current appraisal or value opinion early so you know where you stand before the lender does.
Should I renew with the same private lender or refinance to a new one?
It depends on whether your credit, income, and equity now support a B lender or a bank. Compare the actual numbers on the offer against what a broker can find elsewhere before deciding either way.
What if the private lender offers me a renewal on worse terms?
A worse offer is not final. Negotiate, get a second opinion from a broker, or shop the file to another lender before you sign, since signing quickly out of a sense that you have no choice is the most common mistake at this stage.
What are my options if the private lender refuses to renew?
If you can still make your payments, your main options are another private lender, a B lender, or a bank if you now qualify, or selling the property before the term ends. Start exploring these as soon as you sense hesitation from the lender, not after they say no.
How much notice should I give myself before a private mortgage matures?
Start at least 90 days out, and sooner if your file is complex. That gives enough time to review the property’s value, check your qualifying numbers, and either negotiate a renewal or arrange a refinance.
Does a perfect payment history guarantee my private lender will renew?
No. It is the strongest factor in your favour, but a drop in property value or the lender’s own need for its capital back can still override a clean payment record.
Is the live chat on this page a bot?
No. Chat connects you to a licensed member of the Pekoe team during business hours, and outside those hours a licensed broker replies directly to your message. There is no AI persona answering on Pekoe’s behalf.
Not sure where your private mortgage renewal stands?
No AI persona, no call centre queue, no bank script. A licensed broker, on chat, right now.