Expertly Navigate Your Mortgage Renewal

Renewing your mortgage doesn’t have to be overwhelming. This guide breaks down the process into simple steps to help you secure the best terms and make your renewal as smooth as possible.

1. Preparing for Renewal

Start preparing 4-6 months before your mortgage term ends by reviewing your financial situation and researching market trends. Take note of any changes in your income, expenses, or long-term financial goals.

2. Assessing Your Financial Health

Before renewing, evaluate your financial standing by:

Checking your credit score
Calculating your debt-to-income ratio
Reviewing your overall financial stability

This helps you determine what mortgage terms best suit your current situation.

3. Comparing Lenders and Interest Rates

Don’t limit yourself to your current lender. Explore your options! Some lenders offer better rates and terms for new clients, which could save you money in the long run.

4. Negotiating Your Mortgage Renewal

Use your research to negotiate a better rate with your lender. If they can’t match competitive offers from other lenders, switching may be a smart choice.

5. Finalizing the Renewal

Once you've secured the best terms, review the new mortgage agreement carefully. Ensure all terms match what you negotiated before signing.

How Interest Rate Hikes Affect Your Mortgage Renewal

The Bank of Canada’s interest rate changes directly influence mortgage rates. If rates rise before your renewal, your mortgage payments could increase.

What This Means for Your Renewal

Fixed-rate mortgages: Your current rate remains unchanged until renewal, but you could face higher rates when negotiating a new term.
Variable-rate mortgages: Your payments may increase before your renewal if interest rates go up.

How to Prepare for Rate Increases

Consider locking in your rate: If you expect rates to rise, switching to a fixed-rate mortgage at renewal may provide stability.
Compare offers: Shopping around ensures you secure the most competitive rate.
Reduce your principal: Making lump-sum payments can lower the interest you’ll owe over time.

How to Get the Best Mortgage Renewal Rates

Securing the best rate requires strategy. Here’s how you can improve your chances:

Boost Your Credit Score: A higher score can lead to better interest rates.
Lower Your Debt: Reducing your debt-to-income ratio makes you a more attractive borrower.
Shop Around: Compare offers from different lenders to ensure you're getting the best deal.
Negotiate: Lenders often expect you to negotiate—don’t hesitate to ask for better terms.

Common Mistakes to Avoid When Renewing Your Mortgage

Even though mortgage renewal is a routine process, homeowners often make costly mistakes. Here’s what to watch out for:

Waiting Until the Last Minute: Start early to give yourself time to explore options and negotiate.
Not Comparing Lenders: Sticking with your current lender for convenience could mean missing out on better rates.
Ignoring the Fine Print: Read and understand all terms to avoid unexpected penalties or restrictions.
Focusing Only on Interest Rates: Other factors like prepayment flexibility and portability can also impact your mortgage costs.

By planning ahead with us and exploring all your options, you can secure a mortgage renewal that aligns with your financial goals.

Mortgage Renewal FAQs