When your mortgage is up for renewal, assessing financing options from your current mortgage holder as well as checking current market rates is always the best option. The offer letter from your mortgage holder usually has multiple options for a new rate, but not always the best rate or current market rate.
The lender knows that if you were to move on the maturity date of your mortgage, you would need to pay for legal fees and jump through the hoops of requalifying for a mortgage. With all the new mortgage regulation changes, qualifying for a mortgage isn’t as easy as it was 5 years ago. There are new stress tests where you need to qualify at the Bank of Canada (BoC) rate or the contract rate plus 2%, or whatever is the greater. This is quite different for many homeowners!
When your mortgage is up for renewal, it’s a perfect time to take out extra funds to pay off any incurred debt, use funds for a rental property, or even complete some home renovations.
A professional mortgage broker can help assess your situation and review the rate being offered from your mortgage holder. Licensed mortgage brokers are required to put you in the best financial option for your situation. If that means signing your current renewal with your mortgage holder, we will advise you to do so. But it may make more sense to pull out funds to pay off high interest debts and increase your cash flow, extend the amortization of your mortgage to lower your mortgage payments, or switch to a different lender completely.
As licensed professionals, we care about ensuring you and your family are in the best financial position to achieve your home ownership goals. If you have a renewal coming up, it’s never too early to take a look. The best time to review your current mortgage is when you still have six to nine months left. Reaching out to a mortgage professional here at Centum Mortgage Store, Ltd. before your renewal can help ensure you and your family are taken care of!