Navigating the mortgage renewal process

Is your mortgage renewal approaching? This is something every home owner has to go through, but it can still feel overwhelming and stressful. As with most things, preparation is the key to feeling confident as you go through this process! Here are some important tips to keep in mind as you navigate your mortgage renewal. Plus, here’s how a mortgage broker can support you along the way.

Don’t renew early

First, and most importantly, do not feel like you should renew your mortgage early. Borrowers will get a notice from their lender when their mortgage is approaching renewal, usually a few months in advance. Often, this comes with an offer to renew your mortgage early. This can be tempting, because renewal time can be stressful, and it’s understandable to want to get it out of the way. However, we recommend holding off on this! Most borrowers will be renewing at a higher rate than their current rate. This is due to inflation driving up interest rates in the aftermath of the pandemic. While rates are now falling, they are still higher than most borrowers are currently paying. Renewing early just means taking on a higher rate early, which will of course cost you more. We recommend waiting until you actually reach your renewal date before signing.

Be prepared for changes

Most people get into a comfortable routine of making their mortgage payments with their current lender and product, and renewal time can be intimidating because of the possibility of change. All of a sudden, there might be a different lender available with a better product for you. As we already mentioned, your mortgage rate will change. You might feel a bit overwhelmed by how different things are today compared to how they were when you first secured your mortgage. 

The important thing to remember is change can be good! If you find a new lender who can better serve your needs, you can consider switching over. This can help you feel more supported and secure throughout your mortgage term. You don’t need to automatically renew with your current lender, even though they will likely offer you an early renewal. It’s a good idea to shop around to see what’s out there, because the market has changed. Turn to your local broker for guidance!

Important announcement from OSFI

The Office of the Superintendent of Financial Institutions (OSFI) has recently made an announcement that will make shopping around at renewal time even easier. Previously, in order to switch to a new lender, borrowers with an uninsured mortgage had to pass the mortgage stress test once again. As rates have risen, this has been somewhat of an obstacle for borrowers. As a result, many home owners have chosen to stick with their current lender, even if there are better rates or products available. 

Next month, this rule is set to expire. Home owners with uninsured mortgages will no longer need to redo the stress test to switch to a new lender. This makes the thought of shopping around much more appealing! We recommend taking advantage of these changes and taking the time to look around to see what’s out there. 

Contact a mortgage broker

Of course, in order to fully explore your renewal options, you need to work with a mortgage broker! Your broker will have all the details on the potential lenders and products that would be best for you. More importantly, they have access to these options as well, while the general public may not. You and your broker can evaluate your current situation, and whether any of your financial goals have changed. This will help you decide if you should stick with your existing lender and product, or aim to take on a new one. As experts in the industry, your broker will be able to help you find exactly what you need, even if you aren’t quite sure yourself!

The mortgage renewal process isn’t always fun, but it’s something every home owner will experience. Preparing ahead of time and understanding how renewals work will help you feel more confident. As always, we recommend that you address any questions or concerns you have to a mortgage broker! We work for you to make sure your needs are being met, and we will help you find the right solution every time.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.