Mortgage Renewal Time

Renewing Your Mortgage with Another Lender

Just because you've received a renewal offer from your current lender, doesn't mean you can't get a better deal elsewhere.

Mortgage renewal time is a great opportunity to revisit your financial goals and ensure you renew your mortgage with your future needs in mind.

With busy lives and a lack of advice, borrowers leave it to the last minute to sign their mortgage renewal papers. 65% of borrowers follow the path of least resistance and renew with their current lender. Of these people, 20% do not negotiate, and 45% negotiate a good deal but do not shop around to see what other lenders can offer.

Signing your mortgage renewal papers can be a costly mistake. Homeowners who auto-renew often pay more than necessary. I have reviewed renewal documents from financial institutions stating that clients are receiving a "special offer" that is above current market rates and outdated.

What Happens at Renewal Time?

When the term on your mortgage expires, it's time for you to select a new one. You will receive a mortgage renewal notice two to four months prior in your mailbox. The notice will outline your renewal options and ask you to select your choice and mail the notice back. The rates are not always the best available or can be dated because mortgage rates change often. It's a good idea to talk with a mortgage broker to ensure you are being offered the best deal and choosing the right product.

There will be options and choices the renewal notice will not include. You can increase your payments to lower the mortgage amortization, select a longer or shorter term mortgage, pay down your mortgage principal without added penalties, or refinance your home to access home equity to fund additional goals.

If you are unhappy with your existing lender, move your mortgage to a new one. The process is normally simple. Most lenders have a switch program that allows you to transfer your existing mortgage balance to them at no cost. The program I offer also holds an interest rate for you.

This allows you to take advantage of the best rate available during the four months before transferring the mortgage. If rates go up, you get to keep the lower rate. If rates go down, you will be offered the new rate.

When switching your mortgage, you still have to qualify for your new mortgage payment. Once you are approved, the lender will take care of paying out your existing mortgage at renewal time. It is that easy.

The next time your mortgage comes up for renewal, give me a quick call. Even if you want to stay with your current lender at renewal, seek out a second opinion. I'll shop your renewal to many of Canada's leading lenders to help you find the deal. You absolutely owe it to yourself to keep your lender honest.