Are you wondering about mortgage renewals?
When the end of your mortgage term nears, it’s crucial to think about your next steps. You have a few options to choose from:
- Stay with your current lender at the rate(s) they’re offering for a new term and the current remaining amortization.
- Switch your mortgage to a new lender to benefit from a better interest rate, usually at no cost.
- Refinance your mortgage to improve cash flow, pay off high-interest debts, or access equity to renovate, contribute to your retirement or child’s education.
Keep reading to find out what you need to know before deciding, things to consider, and how to make the right choice. As usual, I am here to help navigate the process so please don’t hesitate to reach out with questions about your mortgage renewal.
What happens at the end of your term?
Your current mortgage provider will send you a renewal offer that you can sign and send back. However, if there’s one thing to keep in mind, banks may not always offer you their lowest rate(s). They make it look easy with the simple check of a box, but you may be missing out on lower interest rates that will save you interest and help reduce the time it takes to pay off your mortgage.
It’s important to take the time to find out if your current mortgage provider is still the best decision for you. Are they providing you with the best options to meet your needs? As your mortgage advisor, I can help you with this process and advise you on your choices; whether to stay and renew with your lender, transfer to a new lender, or refinance.
What should you do when it’s time to renew?
We should start the conversation as early as six months in advance. Together, we will review your current mortgage and discuss any new financial goals to decide what product will best suit your needs. As a licensed mortgage agent, I have access to a variety of lenders on the market and can guide you to potentially better offers than what you currently have. Unlike the mortgage originator you may have used at the bank, a licensed mortgage agent can present you with a variety of options and we all know, options are good!
What to consider before renewing
We know that life is full of surprises. Many changes could have happened throughout your mortgage term. Whether you’re welcoming a new child, found or lost employment, or have
started to save for your children’s education, you want a mortgage that works with you and your evolving financial goals. Staying with your current lender without thought could result in the loss of benefits that a new mortgage product could provide. For example, a new job could make it possible to pay back a large portion of your mortgage, saving you thousands in interest fees. However, if your current mortgage has strict prepayment penalties, it will cost you a premium to make early payments. Changing lenders, however, would allow you to choose a new mortgage with a lump sum or accelerated prepayment option.
If your goals have changed, refinancing your mortgage allows you to access some of the equity in your home to help pay off debt, pay for your child’s education, a renovation, or to contribute to your retirement portfolio.
With all the options available today, it’s worth taking the time to consider all the variables before making a decision. When your mortgage is coming up for renewal, contact me – I’ll make sure that we discuss all the best possible outcomes for your financial goals, now and in the future ahead of you.