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Renewing Your Mortgage at the End of Term

Jackson Middleton • May 07, 2018

It can come as a pretty surprising statistic. About 70 per cent of mortgages don’t make it to the end of the term.

That means a large majority of homeowners for various reasons are ending their mortgages early. But it also means there are still a lot of people out there who will keep their mortgage until it’s time to renew. And if you’re in the second boat, you might be asking yourself what this process is going to look like, and perhaps, what should you do?

For starters, most lenders, especially the big banks will send you a renewal letter when there’s about three months left on the term. Sometimes that letter could come with six months left. Typically, the lender will offer you a rate at that time and all you’ll have to do is sign at the bottom line to roll over your mortgage.

But beware, lenders often offer a higher rate than a new client because they’re hoping the ease of renewal will keep you from seeking out a new lender and lower rate.

Before you sign, it’s always best to call a mortgage broker. A good broker will consider your situation and advise you of the best course of action.

In some cases, it may be best to just sign and roll over your mortgage. There are a few things to consider. If you decide to change lenders, you’ll basically have to go through an approval process again. That entails getting all your documents, lawyer’s fees and appraisals.

You’ll have to ask yourself, is it worth the effort to save a few basis points off your rate, or a few hundred dollars over a term to make the switch?

For some it won’t be. But, if a switch can lead to saving thousands of dollars, it would certainly be something to consider. While everyone’s situation is different, the larger the mortgage, the bigger the savings will be if you can find a lower rate.

Often, homeowners will just use a bank their parents recommend for their first mortgage. But they might find themselves not happy with the service or terms of the mortgage and may just want to switch to a different lender as the mortgage comes up for renewal.

If that’s a situation you find yourself in, you have options, and a mortgage broker can help you make the best decision.


This article was originally included in the DLC May 2018 Newsletter.

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