Did you know… Over the next 1-2 years, half of all Canadian mortgages will be up for renewal?
If you’re unsure about your renewal date, now’s the perfect time to find out. But, whatever you do, be sure to have an experienced mortgage broker negotiate on your mortgage at renewal with multiple lenders – including banks, credit unions, and trust companies – to ensure you secure the best mortgage product and rate based on your specific needs.
Brokers can pull one credit report and shop your deal with numerous lenders. If you try to do this yourself, each lender will pull a report, which will negatively impact your credit score and could prevent you from qualifying for the best possible mortgage.
Too many people simply sign the renewal form sent by their bank/lender up to six months prior to the renewal date without shopping their options. In fact, this is one of the biggest mistakes a homeowner can make.
Accepting this offer most often means you’ll be paying way too much for your mortgage – on average, 1-1.5% higher than you should be paying – and/or your new mortgage won’t adapt to your changing needs as a borrower. It’s important to remember that lenders are in the business of making money, so they won’t often offer the best rate in the renewal letter.
On a $300,000 mortgage, this higher interest rate could translate into a difference of more than $250.00 per month… and over five years you would have paid $15,000+ in additional interest! That’s a lot of money that could have been paid towards the principal balance and helped pay down your mortgage faster.
Mortgage renewal is also the perfect time to take out equity in your home to renovate, pay down debt, send a child to school, take a dream vacation or use however you choose. The benefit of taking money out during renewal is you don’t have to pay any fees to break your mortgage early.
And if your mortgage isn’t up for renewal just yet, it may also be beneficial to have a mortgage broker conduct a free annual mortgage checkup to ensure your mortgage is working for you and keeping more of your hard-earned money in your bank account each month. You have nothing to lose and everything to gain from staying on top of both your short- and long-term mortgage needs.