How to get the best rate
One of the most costly mistakes you can make when your mortgage is up for renewal is renewing without looking at all of your options. Both blindly signing a mortgage renewal statement, or not signing one at all and allowing your mortgage to renew automatically can be costly. Here is what you need to know when it comes time to renew your mortgage.
Start looking 13 months before your mortgage renewal date
Depending on your mortgage lender, it may be beneficial to renew or switch lenders more than a year in advance. A low rate one or two-year mortgage can in many cases be more financially beneficial than riding out the last year of your mortgage at a higher rate, even if you have to pay a penalty.
Secure a rate hold at least four months before your renewal date
Most banks and mortgage brokers can secure a rate hold up to four months at a time. In the even that rates start to rise just before your mortgage comes up for renewal, having a rate hold already in place can save you thousands of dollars. We recommend you get a rate hold both with your existing lender and with a competitor.
Do not accept the banks first offer
In almost all cases, the bank will try to fleece you if they can. You actually have more negotiating power upon renewal than you did when you first got your mortgage. Do not, under any circumstances, accept their first offer. They can, and will, do better.
Know your options
Even if you have been a client of the same bank for your entire life, a consultation with an Accredited Mortgage Professional or mortgage broker will save you money. Renewal time is a great time to compare what other lenders are offering with respect to rates and products features.
Many borrowers realize at renewal time that their original mortgage is no longer suited to their needs or that other lenders offer solutions that may not have been available when the first got their mortgage. Without a consultation however, most borrowers would never realize this.
The best advice is to treat your mortgage renewal as if you are getting a brand new mortgage. Doing so is like buying a new car. Rather than just buying the newer model of the same car from the same manufacturer, it makes sense to take a look at what else is available on the market. You may just find a mortgage that suits you better.
