While most Canadians spend a lot of time, and expend a lot of effort, in shopping for an initial mortgage, the same is generally not the case when looking at mortgage term renewals.
STOP! Please do not sign your lender’s mortgage renewal agreement when you receive it without getting a 2nd opinion from us first. It’s now easier to transfer your mortgage!
Although many Canadians believe that their financial institutions will offer them the best rate upon renewal, this isn’t the case. On the whole, almost 70% of borrowers simply sign and send back the mortgage renewal that is first offered to them by their financial institution.
Without a doubt, a homeowner should NEVER, EVER accept the first mortgage renewal offer.
Your current financial institution
Financial institutions of all types, especially large banks will play the odds and send mortgage renewals in the mail or now they are offering the convenience of online mortgage renewal with rates that are .25% – 1.25% higher than the best rates in the market. Without any negotiation, simply signing and accepting the offered rate on a renewal, will undoubtedly cost the homeowner/borrower thousands of dollars of unnecessary interest on their mortgage. Furthermore, if you are paying a higher mortgage interest rate, you are also paying less mortgage principal.
It Pays To Shop Around
Generally, it is a good idea to start shopping for a new term between four and seven months before your current mortgage term expires. Our team at Mainstream Mortgages starts reminding our clients 210 days before the mortgage renewal. This can be especially beneficial in a rising interest rate environment. In a rising interest rate environment, many lenders send out your renewal letter very close to the time that your term expires with the result that you the borrower will pay a higher interest rate and earn the financial institution more money.
On the other side, when there is a shrinking interest rate environment, financial institutions will start sending mortgage renewals up to 6 months in advance. Again, with the intention of borrowers paying a higher interest rate in order to earn more profits. This may not give you the time to arrange for a mortgage term through a different lender or find a better deal. So, this means that you need to be tracking your own mortgage term timeframe to be sure that you know when it is time to start shopping for a good mortgage renewal rate.
Before you ever hear from your lender about renewing your mortgage term, have Peter, Derek, and Colten shop around for you, you will be amazed at what they can accomplish on your behalf!
You May Be Able To Save Thousands Of Dollars
Your mortgage is one of your biggest expenses and the Mainstream Mortgage Team can save you $1000s of dollars in unnecessary interest. For this reason, it is imperative to find the best interest rates AND mortgage terms that you possibly can. When you shop around at renewal time you can save substantial amounts of money over the life of your mortgage loan. Don’t be one of the 70% who just simply sign or click their renewal offer and send it back. Undoubtedly, you need to call the Mainstream Mortgage Team
What We Do
When we process a mortgage renewal, we refer to it as either a switch or a transfer. We like to point out that when processing a switch or transfer application for the client, we need to emphasize that it is a full mortgage application that needs to be underwritten/adjudicated by the new lender. We also need to emphasize that in almost all mortgage renewal/switch/transfer applications all of the fees (legal, transfer, discharge, etc.) will be covered by the new lender. What’s more is if the existing lender is charging a penalty or other fee, we can capitalize or include up to $3,000.00 of these costs into the new mortgage.
P.s. Should your current financial institution have a better deal, We will be the first to tell you.