When you receive your mortgage renewal agreement from your lender, stop! Before you sign anything, it’s crucial to get a second opinion from us at Mainstream Mortgages. Transferring your mortgage has never been easier, and it could save you a significant amount of money.
The Myth of the Best Rate from Your Financial Institution
Many Canadians assume their financial institution will offer them the best rate upon renewal. However, this is rarely the case. Almost 70% of borrowers simply sign and return the first mortgage renewal offer they receive from their lender without seeking a better deal.
It’s important to remember: NEVER, EVER accept the first mortgage renewal offer.
Your Current Financial Institution
Financial institutions, especially large banks, often send renewal offers that are 0.25% to 1.25% higher than the best rates available in the market. They count on the convenience of online renewals and the tendency of customers to avoid negotiation. By simply accepting the offered rate, homeowners end up paying thousands of dollars in unnecessary interest and reducing the amount paid towards the mortgage principal.
The Importance of Shopping Around
It’s wise to start shopping for a new mortgage term between four and seven months before your current term expires. At Mainstream Mortgages, we begin reminding our clients 210 days before their mortgage renewal date. This proactive approach is especially beneficial in a rising interest rate environment, where early renewal can save you from higher rates.
In contrast, during periods of falling interest rates, financial institutions might send renewal offers up to six months in advance, hoping to lock you into a higher rate before rates drop further. This tactic limits your time to find a better deal with another lender. Therefore, it’s essential to track your mortgage term timeframe and start exploring your options early.
Before you hear from your lender about renewing your mortgage, let Peter, Derek, and Colten at Mainstream Mortgages shop around for you. You’ll be amazed at the savings they can secure on your behalf.
Potential Savings: Thousands of Dollars
Your mortgage is one of your largest expenses, and the Mainstream Mortgage Team can help you save thousands of dollars in interest. Securing the best interest rates and terms is critical to minimizing your costs over the life of your mortgage. Don’t be part of the 70% who simply sign and return their renewal offer. Reach out to the Mainstream Mortgage Team instead.
What We Do
When we handle a mortgage renewal, we refer to it as either a switch or a transfer. It’s important to note that this involves a full mortgage application process that must be underwritten by the new lender. Fortunately, in almost all cases, the new lender covers the associated fees (legal, transfer, discharge, etc.). Additionally, if your existing lender charges a penalty or other fee, we can include up to $3,000 of these costs in the new mortgage.
P.S. If your current financial institution offers a better deal, we will be the first to let you know.