Review all of your options before you sign that mortgage renewal offer
One out of four homeowners will receive a letter in the mail from their lender telling them their mortgage is coming up for renewal this year. Is it worth shopping around?
The number of renewals has climbed 25 per cent each year since many homeowners have switched to shorter term mortgages. At one time the five year fixed term was what most homeowners would gravitate to, but in recent years the two and four year terms have become just as popular, leading to more renewals every year.
Most people will choose to stay with their current lender for the ease, comfort, convenience and simply that they know them. It is worth shopping around, the few hours of your time it takes to do your research, ask questions and sign on with a new lender could save you in the long run and put more money back in to your pocket.
In 2014 a report from the Mortgage Professionals Canada found that 20 per cent of these customers coming up for renewal chose to switch lenders for a better deal. The could include a better rate, a better term, or better prepayment options. This can be a significant savings and worth doing your homework for.
You can start negotiating your mortgage 120 days before the renewal date locking in a great rate without penalty. This is a great option for any homeowner who is worried about rising mortgage rates.