In today’s mortgage climate many Canadians are feeling anxious when asked about how they feel about rising interest rates ahead of their next renewal. Rising interest rates are creating extra financial strain on homeowners leading some people to dip into savings to help offset the rising cost of living and increased mortgage payments. Below you will find some information when is comes time for your mortgage renewal and some things to consider before signing.
When to renew:
Your mortgage renewal process typically time starts around 120 days before the end of your current mortgage term. It’s an important time to explore your options but do NOT sign a renewal right away. A Mortgage Professional can help navigate this area and “shop” around on your behalf with your existing bank and other lenders for the best mortgage deals. Many people are of the understanding that remaining with your existing mortgage lender is easier than shopping around, or that the offer from their existing bank is the best deal. However, this may not be true. A Mortgage Professional can assess your individual needs and could potentially save you thousands and/or get you an even better mortgage product if your needs have changed.
At renewal time consider if: (these points will help to address your specific needs and what mortgage product is right for you)
- you want to consolidate other debts that have higher interest rates and increase the amount of your mortgage to a lower rate (for example some Canadians can help manage their debt by consolidating their unsecured debts (like credit card balances) into their mortgage). The advantage is that your mortgage interest rate may be lower than many other forms of debt. This can reduce the amount of money you will have to pay in the long run. **speak to your Mortgage Professional to see if this type of mortgage is the right fit for you.
- you are able to increase your payments to pay off your mortgage sooner and save on interest
- you want to change your payment frequency
- you’re able to make additional payments to pay the mortgage down sooner
- you’re satisfied with the services offered by your current lender
Shop around
You don’t have to renew your mortgage with the current lender. You can move your mortgage to another lender if their conditions better suit your needs. Contact Us for all the available options, at no cost or obligation a few months before the end of your mortgage to see if we can find better mortgage products or options that better suit your needs. We may be able to find you a better rate than you currently have as well as help you decide on a better mortgage product that will fit your current situation or future needs. We can provide all the necessary information to help you make an informed decision for your renewal.
If you have a year or two left on your mortgage term, but are seeing changes in the market, you may want a head start on the mortgage renewal process. This would involve breaking your mortgage term sooner and potentially paying penalties or fees (depending on your product or lender). We can help to run the scenarios to see if breaking your mortgage term early would result in worthwhile savings long term.
Reach out today to learn how you can potentially save thousands of dollars.
