Quite possibly the most overlooked process involved in the homebuying process is when it comes time to renew your mortgage term. The most common length of term is 5 years, or 60 months. It can range from 1 year to 10 years, and largely depends on your individual situation. There are open terms, closed terms, partially open terms, fixed rates, variable rates, blended rates.. There are lots of things to consider.
Assuming you have made your mortgage payments on time and you don’t have any outstanding debts with Revenue Canada, you can expect to get a renewal offer from your current lender.
When you are nearing the expiry of your current mortgage term, this is the best time to reassess your needs. Your existing lender will make the process seem very easy and seamless, and will show how they are getting you a better deal then before.
The truth is – at this point in time, you should be getting a better deal then you had before, no matter what. Right now, interest rates are historically low, and your lender is only 1 out of 35 that I work with, that would love to compete to fund your mortgage.
Renewing should be treated with a completely different approach than purchasing your home. Rates and monthly affordability are important. But topics such as lowering your amortization (total length of time it will take to pay off your mortgage), and the amount of your home that you own in equity (your loan to value), are extremely significant.
A mortgage professional is without doubt, your best resource as you approach renewing your mortgage term. While the banks focus on their best interest, I focus on yours. Decisions you make during this time have a huge financial impact, both short and long term. Don’t pass up an opportunity to set yourself up for success, solely because of how easy renewing with your current lender may seem.
I’m here to help every step of the way and make sure you are taken care of. Reach out to me at any time and we can get a plan in place!