How to prepare for your mortgage renewal

Is your mortgage renewal approaching? This is a common and standard part of homeownership, but you might not know what to expect. In this post, we discuss some tips to help you get ready for this process, and how a mortgage broker can help. 

Don’t renew early

Many lenders will reach out to their borrowers with an offer to renew earlier than their official renewal time. This might seem tempting, as the renewal process can feel stressful and complicated. An offer to get it out of the way early can be very appealing, but we recommend holding off. A mortgage renewal in 2024 will mean you will be renewing at a higher rate than the one you were approved for. Since your original mortgage approval, interest rates have undergone significant increases thanks to the pandemic, housing market, and inflation. As a result, as soon as you renew, you will start paying a higher rate. If you renew early, you will just start paying more sooner. The longer you wait before your renewal, the more you will save on interest.

How can you prepare yourself?

If this is your first time renewing your mortgage, it’s natural to feel a bit stressed or nervous about the process. One of the most important first steps is to confirm your actual renewal date. From there, work your way backwards and start preparing for your renewal at least two months in advance. You can use this time to look at all your options, and select and secure the right product. You will also feel less anxious knowing you have enough time to thoroughly go through your choices and make the right decision. You should also examine options outside those of your lender! Although many Canadians choose to renew with their existing lender, you are not obligated to do so. It’s a good idea to look around in case there is a lender out there who might be more suitable for you. Of course, you might find your current lender is still your best choice! However, you can have peace of mind knowing you did the proper research.

With this in mind, we recommend thinking about your budget early. Since your mortgage payments will increase, this can cause some strain if you are unprepared. You might as well start getting ready now! You can refresh yourself on your prepayment options, and if possible, make prepayments before your renewal. This will lower your mortgage balance, which reduces the amount you will need to pay at a higher rate.

Why should you use a mortgage broker?

The best way to get ready for your mortgage renewal is to contact a mortgage broker! We can review your options with you to determine whether you should renew with your current lender, or explore another option. We can also guide you through budgeting for your new interest rate. You don’t need to do all the work on your renewal alone! Your broker is here to support you throughout the whole process. 

Every home owner experiences a mortgage renewal at some point, and it can be hard to know how to prepare. The good news is your mortgage broker is here to support you through the entire process! If your renewal is coming up, now is the time to reach out. 

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.