Your mortgage up for renewal and You want to sell?
Mortgage renewal next month — sell now or get stuck with a big penalty?
Quick, blunt answer
If your mortgage is up for renewal and you want to sell, do not guess. Plan. You can sell with less cost, faster closings, and higher net proceeds — but only if you follow a clear playbook.
Here’s a direct, no-fluff plan that works in a hot market or a slow one.
1) Get the mortgage facts first
- Pull your mortgage statement today. Note the renewal date, remaining balance, interest rate, and remaining term.
- Ask your lender for the exact payout figure and the prepayment/penalty formula. Get it in writing.
- Check portability: can you transfer the mortgage to another property? Is it assumable by the buyer?
Knowing numbers lets you choose the cheapest path: renew, transfer, refinance, or break.
2) Calculate the real cost of selling before renewal
- Break penalty vs. selling costs: compare lender penalty to realtor fees, legal fees, closing adjustments.
- If the penalty is larger than selling costs, consider timing the sale after renewal. If smaller, proceed now.
- Use a net-proceeds worksheet with scenarios: sell before renewal, sell right after renewal, transfer mortgage, or get buyer who assumes mortgage.
3) Use timing to your advantage
- If your renewal is days away, ask the lender for a payout date that matches your closing date.
- Coordinate offers, firm closing, and possession to minimize days you carry two mortgages.
- If the mortgage is portable, market to buyers who want assumable financing — it’s a selling point.
4) Work with a mortgage-aware realtor and lawyer
- The right realtor negotiates closing dates and contingency wording that limit penalties.
- A lawyer calculates exact payout and structures closing to avoid surprises.
- This is not DIY. You need a pro who knows mortgage penalties and bridge financing.
5) Quick tactics to increase net proceeds
- Price to attract multiple offers. Faster sale = fewer days paying both mortgages.
- Stage and photograph for top-dollar offers. A stronger price often outweighs a small penalty.
- Offer flexible closing options (rent-back, possession hold) to bridge timing with buyers.
Final checklist before you list
- Confirm payout/penalty in writing from lender.
- Decide: sell before renewal, sell after, or transfer/assume mortgage.
- Line up realtor, lawyer, and lender contact.
- Run net-proceeds scenarios and choose the path with the highest cash to you.
Tony Sousa is a local market expert who helps homeowners sell when mortgages renew — fast decisions, clearer math, better outcomes. For a free net-proceeds review and penalty calculation, email tony@sousasells.ca or call 416-477-2620. Visit https://www.sousasells.ca
