Since your mortgage is likely one of the biggest debts you carry it is wise to re-visit your mortgage on a regular basis, if nothing else at least as your mortgage comes up for renewal.
How has your mortgage served you over the last term? Have you been happy with the lender and their level of service (its not always about interest rate!)? Has your personal situation changed? Do your require money for home renovations or sending a child off to university? What about that dream cottage you have had your eye on-could this be the year?
Many people tend to “set it and forget it” however this approach to managing your mortgage will cost you more in the long run. Your current lender will be more than happy to give you short notice of your mortgage renewal and rush you to sign at less than competitive rates. This will seem like taking the path of least resistance, however it will come at a price.
What should really happen is we explore all your options from all the lenders in the marketplace to ensure we find a mortgage the best suits your interests at this time. It is important to get approved 6 months before your mortgage expires with another lender. This will protect you against a rise in interest rates, allowing you to “lock-in” a lower rate come maturity.
Why is renewal such a crucial time in the history of a mortgage?
- On the maturity date you can prepay any lump sum amount, even a small amount will go a long way to accelerate your mortgage. This can be done without penalty as your mortgage is “fully open”.
- You have the option of transfering to another lender without incuring any major legal fees or prepayment penalties
- You can also consider changing your payment frequency, changing from a monthly payment to a bi-weekly or weekly payment can reduce the amount of interest you will pay over the life of your mortgage
If your mortgage is coming up for renewal in the next 6 months then please contact us today so we can put your mortgage renewal plan in place.