As a homeowner in Canada, the mortgage renewal process can be a stressful time. But with a little bit of preparation and research, you can ensure that you secure the best mortgage rate and terms for your needs. Here are some steps you should follow when your mortgage is up for renewal:
Start early: Don’t wait until the last minute to start thinking about your mortgage renewal. It is a good idea to start shopping around for mortgage rates and terms at least four to five months before your current mortgage expires.
Get Comparative Solutions: Having your mortgage broker shop around for the best mortgage rate and terms is always a good idea. Lenders constantly change their offerings, and your current lender may not be the right fit for you.
Consider a fixed-rate mortgage: If you want stability and predictability, a fixed-rate mortgage might be your best option. With a fixed-rate mortgage, your interest rate will remain the same for the entire mortgage term, usually between one and five years.
Consider a variable-rate mortgage: If you are comfortable with a bit of risk and want to take advantage of lower interest rates, a variable-rate mortgage might be the best option. With a variable-rate mortgage, your interest rate will change based on the Bank of Canada’s prime rate.
Review your financial situation: Before you renew your mortgage, it’s essential to review your financial situation. Look at your income, expenses, and debts to determine how much you can pay monthly. Consolidating some of your debt into the mortgage may make sense to lower your overall monthly payments.
Consider the costs: When you renew your mortgage, costs may be involved, such as legal fees, appraisal fees, and penalties for breaking your current mortgage contract early. Ensure you understand all the costs associated with renewing or transferring your mortgage and factor them into your decision.
By following these steps, you can ensure that you secure the best mortgage rate and terms for your needs when your mortgage is up for renewal. Don’t be afraid to ask questions and do your research to make the best decision for you and your family.