5 Things to Consider When Renewing Your Mortgage in Canada

If your mortgage term is coming to an end soon and you haven’t finished paying it off, you’re probably thinking about your options for renewing your mortgage. This is a great time to check in with your mortgage broker and lender and determine if you’re happy with your current mortgage plan or if you should make changes while you have the chance. 

The renewal statement you receive from your lender towards the end of your term will include information such as your term length, interest rate, and remaining balance. This is the interest rate your lender is offering for your next term. However, you might be able to negotiate a lower rate with your lender than what they advertise upfront. 

There’s also more to consider when renewing your mortgage than just the lowest possible interest rate. For example, there may be a higher penalty for breaking your mortgage early, or the ability to break your mortgage early might only be an option if you’re selling your home. These are other reasons to make sure you have a great mortgage broker like Your Mortgage Guide to help you read the fine print. 

5 things to consider when renewing your mortgage to help you get started:

1. Consider your financial goals and how they’ve changed

Most mortgage lenders let you start the mortgage renewal process about four months, or 120 days, before your current mortgage term is over. At this point, it’s a good idea to begin researching mortgage terms from various lenders. This is a great time to get in touch with Your Mortgage Guide and let us help you through this process.

2. Consider your financial goals and how they’ve changed

The average mortgage term length is five years. A lot can happen in that time. Your life circumstances may have changed and you may have new financial goals. Changing your mortgage to a different lender might help you consolidate debt or make other financial decisions. This gives many people peace of mind and a greater sense of control over their finances. Considering all your options when renewing your mortgage may help you do the same. 

3. Think about how frequently you can make payments

One of the things you’ll want to consider when renewing your mortgage is the frequency of payments. If you think more or less frequent payments would be better for your upcoming term, ask your mortgage broker and lender about this. While more frequent payments may help you pay off your mortgage faster if you have the financial flexibility, less frequent payments will help you prioritize paying off other debts or saving towards other goals.

4. Do you get good customer service from your lender?

The customer service provided by a lender could be a factor when considering your mortgage, as you will have to maintain a relationship with them for a long time. If you find it difficult to contact your current lender, it’s a good idea to take that into consideration. As an industry expert, Your Mortgage Guide will help you find the best lender for your needs. Often, lenders will have fees for switching to them, but a good lender might waive some of these fees as incentive.

5. Ask if you can get a rate hold when you switch

A mortgage broker like Your Mortgage Guide can look at your credit report and find a list of lenders who will offer their best rates. Your mortgage broker will let you know what rate you could qualify for if you choose to switch lenders.

In this case, consider asking your potential lender for a rate hold. This means the interest rate offered to you can’t go up in the days while you’re considering your options. This also allows you and your mortgage broker time to go back to your original lender and see if you can get a better counter offer.

The Bottom Line

There are many factors that go into the mortgage renewal process. Whether you keep the same lender or a new one, change interest rates and frequency of payments, Your Mortgage Guide can help you be prepared. We’ll walk you through the options and make sure you’re armed with the knowledge to make the right decision for you, your family, and your future. 

With our guidance, you’ll have the peace of mind to go into your next mortgage term worry-free. Contact us today and let us guide you through the process.