If your mortgage is not yet paid up, it will have to undergo a renewal process once the original term has expired. But while some homeowners dread renewing their mortgages, experts say it doesn’t necessarily have to be a complicated process. You can save yourself some money by negotiating a better rate by following a few expert tips.
The first thing to remember is to shop around early. Start looking at alternatives around six months before your mortgage is up for renewal, especially if you want to negotiate a better interest rate. Mortgage lenders can hold the rate for a period of time, so if you shop around early on you can agree to a rate going forward.
Another thing to remember is to always shop around and consider options from other lenders. You can check the interest rate given by other financial institutions so that you know what’s out there and what your options are. It doesn’t have to take a lot of time as you can look for various options online to get the ball rolling.
Hiring a Mortgage Broker
If you are not sure how to handle the entire process or if you want to make sure that you get the best mortgage interest rates available, work with an experienced mortgage broker. They can help you compare the different options and choose the best one once your mortgage is up for renewal.
It might not even cost you anything to work with a mortgage broker, as the bank or financial institution will usually pay them a commission when they take over your mortgage.
It is important to know what options are out there, especially things such as fixed and variable interest rates, the flexibility of your repayments, and amortization periods.
Mortgage Interest Rates Aren’t the Only Factor
When your mortgage is up for renewal keep in mind that your mortgage interest rates are not the only thing you should look out for. Around 30 percent of Canadians will automatically renew their mortgages when their term is up, without shopping around for a better deal.
One thing you can consider is the option between a fixed term and a variable term mortgage. Consider what your repayments will be, as well as possible interest rates and how this can affect you financially. If you currently have a variable interest rate mortgage, switching to a fixed term mortgage can be a benefit.
These are only some of the things you should consider when your mortgage term is up. You can speak to the team at Mortgage Guys for expert tips and advice on how to properly renew your mortgage, get the best mortgage interest rates, and save money in the process.