6 Tips for Mortgage Renewal

According to an Angus Reid survey, one of the biggest expenses Canadians are paying for is their mortgage payment! The same survey also found that almost 27% of Canadians automatically renew their mortgage instead of trying to look around for a better deal.

Here are 6 tips to help with your mortgage renewal and to, hopefully, lower your mortgage payments.

  1. Get Going Early

Start shopping around for a better mortgage rate. Your best option is to start around 4 to 6 months before your mortgage renewal.

  1. Do Your Homework

Before negotiating, start shopping around and see what other lenders are offering. Plenty of lenders offer their rates online. These rates can vary widely depending on the type of mortgage you are looking for. Always make sure to look at what others are offering before you decide on which rate.

  1. Change Lenders

Though some Canadians might just renew their mortgage, some do not think about changing lenders. There is no penalty if you do switch your lender at renewal time, as there are probably better options out there that you should consider.

  1. Never Accept the Banks Posted Rate

Banks might be more willing to lower their mortgage rates if you decide that you want to transfer over more accounts, like an RRSP. Therefore never accept the first offer the banks will give you, and try to negotiate a better rate.

  1. Negotiate on other options

Don’t be fixated on the interest rate! The flexibility of  the payment schedule, the amortization period, the rate type (fixed or variable) can all be crucial to the overall cost of your mortgage. Always make sure to look at the other variables in your mortgage renewal before making a final decision.

  1. Mortgage Broker

If you don’t like doing the negotiating, you can hire a mortgage broker like me!  I will do the legwork for you. I get be paid a commission by the lender and you won’t get charged a thing. Plus a portion of my commission is put into the Community Mortgage Movement’s Endowment Fund, and helps your community.

Something to think about (Bonus tip)

Saving even half a percentage point on your mortgage rate can earn you a savings of up to $10,000 over 25 years (This figure itself is based on a 150,000 mortgage).