The maturity date of a mortgage is when the mortgage term ends. The maturity date is often referred to as the renewal date. On the maturity date, the borrower(s) have the option to renew their mortgage with their existing lender, if given an offer, refinance their mortgage, or pay their mortgage off completely.
If a mortgage is refinanced or paid in full on the maturity date, there is no penalty applied to the borrower(s) as they are not breaking their mortgage mid-term, as the term comes to an end.
Usually, if a borrower maintains good standings with their mortgage lender, during the term of the mortgage, and they have not be delinquent on any mortgage payments, they are offered a renewal of their mortgage, without going through the initial qualification requirements for the mortgage, such as credit and income qualifications.
It is always recommended that a borrower searches for a lower interest rate or better terms for their mortgage, with a mortgage broker approximately 3o to 120 days before the maturity date of their mortgage, to take advantage of lower rates and terms in the market, without paying a penalty, as the new mortgage lender would take over the existing mortgage(s) on the property on the maturity date.