If you’re a homeowner in Canada, you may be familiar with renewing your mortgage. When your mortgage term comes to an end, you have the option to renew your mortgage with your existing lender or switch to a new lender. In this blog post, we’ll take a closer look at the mortgage renewal process in Canada and what you need to know to make an informed decision.
When to Renew Your Mortgage?
Your mortgage term typically lasts between one and five years, depending on the terms of your mortgage agreement. As your mortgage term approaches its end, your lender will typically contact you to discuss your options for renewal. It’s important to start thinking about your mortgage renewal well in advance, as switching lenders or negotiating better terms with your existing lender can take time.
Your Options for Mortgage Renewal
When it comes to mortgage renewal, you have two main options: renewing with your existing lender or switching to a new lender. Renewing with your existing lender is often the easiest option, as your lender will typically offer you a new mortgage agreement with similar terms to your previous agreement. However, shopping around and comparing mortgage rates from different lenders is important to ensure you’re getting the best deal.
Existing Lender vs. Switching to New Lender
Renewing with Your Existing Lender
Renewing your mortgage with your existing lender is often the easiest option. This can be a good option if you’re happy with your current lender and the terms of your mortgage agreement.
However, it’s important to remember that your existing lender may not always offer you the best mortgage rates or terms available. If you’re considering renewing with your existing lender, it’s a good idea to shop around and compare rates from different lenders to ensure you’re getting the best deal.
One potential advantage of renewing with your existing lender is that it can be less time-consuming than switching to a new lender. If you choose to renew with your existing lender, you may be able to avoid having to go through the mortgage application process again, which can save you time and hassle.
Switching to a New Lender
Switching to a new lender for your mortgage renewal can be a good option if you want better mortgage rates or terms. When you switch lenders, you’re essentially applying for a new mortgage, so you’ll need to go through the application process again.
You’ll need to shop around and compare mortgage rates from different lenders to switch lenders. You can do this online or work with a mortgage broker who can help you find the best rates and terms for your needs. Keep in mind that there may be fees associated with switching lenders, such as discharge fees, legal fees, and appraisal fees.
One potential advantage of switching to a new lender is that you may be able to negotiate better mortgage terms than you could with your existing lender. New lenders may be more willing to compete for your business and offer you better rates and terms to win your business.
Negotiating Better Mortgage Terms on Mortgage Renewal
If you’re considering renewing your mortgage with your existing lender, you may be able to negotiate better terms on your mortgage agreement. For example, you could ask for a lower interest rate, a longer or shorter mortgage term, or more flexible payment options. It’s important to be prepared to negotiate and have a good understanding of the current mortgage market to make informed decisions.
Finding the Best Mortgage Rates
If you’re considering switching lenders for your mortgage renewal, it’s important to research and finds the best mortgage renewal rates available. You can compare mortgage rates online or work with a mortgage broker who can help you find the best rates and terms for your needs. Remember that the lowest rate may not always be the best option, as there may be other fees and charges associated with the mortgage.
Compare Rates Online
An online mortgage rate comparison tool is one of the easiest ways to compare mortgage rates. These tools allow you to compare rates from different lenders side-by-side, making it easy to see which lender offers the best rates and terms. You can also use these tools to calculate your monthly payments based on different rates and terms.
Work with a Mortgage Broker
Another option is to work with a mortgage broker. Mortgage brokers are licensed professionals who can help you find the best mortgage rates and terms for your needs. They have access to a wide range of lenders and can negotiate on your behalf to get you the best deal. Remember that mortgage brokers may charge fees for their services, so be sure to ask about their fees upfront.
Check with Your Current Lender
If you’re considering renewing with your existing lender, it’s still a good idea to shop around and compare rates from other lenders. However, it’s also worth checking with your current lender to see if they can offer you a better deal. Your current lender may be willing to negotiate your rate or offer you other incentives to keep your business.
Consider Other Factors
When comparing mortgage rates, it’s important to look beyond the interest rate. Other factors include the length of the mortgage term, the payment frequency, and any fees or charges associated with the mortgage. For example, a mortgage with a slightly higher interest rate may be a better deal if it has more flexible payment options or lower fees.
Mortgage renewal Canada can be a complex process, but with the right information and preparation, you can make informed decisions and ensure you get the best mortgage terms for your needs. Whether you’re renewing with your existing lender or switching to a new one, be sure to shop around, negotiate, and research to find the best mortgage rates and terms available.