When you take out a mortgage, it's for a set period of time known as the mortgage term. Since most homeowners go through several terms to fully repay their mortgage, this is something you've likely experienced or will experience in the future!
If your mortgage is with a federally regulated financial institution, like a bank, they are required to send you a renewal statement at least 21 days before your current term ends. This is your opportunity to reassess your mortgage needs and ensure you have the right product.
Here's What to Consider Before Renewing Your Mortgage:
1 | Shop Around
You don't have to renew with your current lender! Shopping around for better rates can save you money. This is also a good time to consider switching between fixed and variable rates, depending on market conditions. Just be aware that switching lenders might come with upfront costs (like registration and transfer fees), and the new lender may have different qualifying criteria.
2 | Assess Your Amortization Period
Depending on your current circumstances, you may want to adjust your amortization schedule. If you have the means to shorten your amortization you'll incur less interest over time. If you're renewing at a higher rate, extending your amortization can help lower your monthly payments to a more comfortable amount.
3 | Evaluate Your Payment Frequency
Switching to more frequent payments, like bi-weekly instead of monthly, can shorten your loan's lifespan and save you money over time.
4 | Re-visit Your Future Plans
If you anticipate significant life changes that could impact your finances - such as marriage, divorce, a career change, or having children - factor these into your mortgage renewal decisions.
Everyone's circumstances and property goals are unique! If you'd like to connect with one of our preferred mortgage partners, feel free to reach out.
