The biggest single monthly payment most Canadians have is their mortgage. Interestingly though, not everyone bothers to shop around when their current term expires. They just automatically renew their mortgage with the same lender.
Here are a few tips to remember when you are ready to renew your mortgage.
If you don’t ask, you won’t get
If you automatically renew with your current lender, you are very unlikely to get the best deal you can, even from that lender. Nobody’s going to offer you a better deal unless you ask for one.
Start shopping early
Lenders will typically guarantee a rate for 90-120 days. Get a rate as early as possible, and then if rates go up before it’s time to renew, you will still be guaranteed the lower rate.
Consider changing lenders
There is no penalty for changing lenders on the mortgage renewal date, so if another lender offers you a better deal, don’t be afraid to switch.
Think about making changes to your mortgage
Over the term of a mortgage, your situation may have changed. The good news is, many details of your mortgage can be changed at renewal time as well.
The new term can be fixed or flexible, and the amortization period can be altered. Renewal time is also an opportunity to take out some money for renovations, either by tapping into the equity you’ve built up on the home or by taking out a line of credit. Refinancing may also be possible at renewal time. Talk to a specialist such as a mortgage broker about the options that best suit your current needs.
Contact a mortgage broker
Get someone to do the heavy lifting for you. Find a mortgage broker you trust and let them do the negotiating. Their expert knowledge doesn’t cost you anything as their commissions are paid by the lenders.