Don’t just sign on the dotted line
When the term on your current mortgage expires, it’s time to renew your mortgage. A mortgage renewal is an opportunity to negotiate a better interest rate, better terms or consolidate debt.
The bank or financial institution you currently have your mortgage with will offer you an automatic renewal. Typically, they will send you written notice a few weeks before your renewal date. The easiest solution may be to just sign on the dotted line. By doing so, you forfeit the opportunity to explore additional options, potentially costing you thousands on your future loan.
Over half of Canadian mortgage holders will re-sign with their existing lender under the same terms. Borrowers rarely ask questions about their mortgage as they don’t want the hassle of renegotiating with the lender. Lenders know this and therefore won’t offer the lowest rate or best terms available come renewal.
That’s where we come in. When it’s time, we’ll take care of your mortgage renewal so you don’t have to. We will assess your existing mortgage, compare it to the current market conditions and negotiate with lenders on your behalf. We specialize in mortgage renewals for homeowners in all situations including standard renewals, homeowners seeking advanced pre-approvals and early renewals, regardless of debt, income or credit.
A mortgage is probably the largest expense you will ever have and making this mistake could cost you thousands! If you want to get a renewal reminder simply let us know here and three months before your renewal date we’ll send you an email with more information on how to get started.
Frequently asked questions
What is a mortgage renewal?
A mortgage renewal is when your current mortgage term comes to an end and you sign-on for a new term (or pay off your existing mortgage). When you sign for a new term you’re essentially signing a new mortgage for the remaining balance owed. For example, if you have $350,000 remaining on a mortgage that was originally $500,000, your new mortgage will be for $350,000.
How will I know when it’s time to renew my mortgage?
Most lenders are required to provide you with a renewal statement at least three weeks before the end of your term so when your mortgage term is nearing an end, keep an eye on your mailbox or your email inbox for the renewal statement.
Your renewal statement will include information about your mortgage that’s included in your normal statements, such as your current balance, payment amount, payment frequency, etc., as well as a renewal form that you can sign and send back.
Do I have to stick with my current mortgage holder?
No. When it’s time to renew your mortgage, you can go with any lender you choose. In fact, moving your mortgage to a different lender may better suit your needs. Your new lender will need to approve your application just in case the criteria they use for approval differs from your original lender.
Isn’t it easier to just auto-renew?
Yes, it may be easier to simply renew your existing mortgage. However, it may work against you. Ignoring your renewal and re-signing the initial agreement means you forfeit your chance to renegotiate the terms of your mortgage contract, including the length of your next term, your interest rate and even your lender. Being able to change your mortgage at set intervals means that you can also change your mortgage to better align with your needs and what’s happening in the housing market as a whole.
What’s the biggest disadvantage of an automatic renewal?
Most homeowners renew their mortgage with the same lender that holds their current mortgage. It doesn’t seem like a big deal; it’s much easier and more convenient to simply accept the terms, sign the paperwork, and send it back to your lender.
However, by not exploring other options, you could be leaving thousands of dollars on the table. This is your opportunity to explore other options and test the market to see if you can find a better rate and/or more flexible terms elsewhere. And, chances are you probably can. Even if you are happy with your current lender, a mortgage broker can at least check with your current lender to see if they will give you a better deal before taking your mortgage elsewhere.
Why should I work with a broker when it’s time to renew?
Mortgage brokers aren’t just helpful when you get your first mortgage. They’re also able to help you in the same way they did for your first (or second) mortgage: by shopping around for the best rates among multiple lenders who are doing the legwork for you.
Even if your mortgage isn’t up for renewal, don’t wait for your lender to notify you. Contact your broker up to a few months before the end of your term so they can get going on the process for you. A mortgage broker can be extremely helpful during the negotiation process and ensure you get the best terms and rates as possible.
How can you use a second mortgage?