When it’s time to renew your mortgage, expect a renewal reminder from your lender. A mortgage renewal is when you take the remaining balance of your mortgage and start a new term at a new interest rate that’s hopefully lower.

But before you sign those papers, consider these five tips for approaching your mortgage renewal successfully.

Tip #1: Examine Your Current Financial Objectives

Choosing the right lender and product revolves around what you need in a mortgage. Start by asking yourself:

  • Does your current provider offer a mortgage that adequately meets your needs?
  • How would extra money (like a windfall or inheritance) affect the pre-payment options you want?
  • Depending on how much you owe, is it better to refinance your mortgage or get a HELOC (Home Equity Line Of Credit) to access equity?
  • Should you extend your amortization period to reduce your monthly mortgage payments?

Tip #2: Shop Early to Get the Best Rate

It’s good practice to start your negotiating process up to 120 days before your renewal date. But it’s your responsibility to stay on top of this. Likely, your current lender won’t send a renewal reminder until you have about 30 days left on your term.

Start by negotiating with your current lender. If you’re unhappy with their offer, you have lots of time to consider switching providers. Early preparation gives your realtor time to find the best offer and to have all the necessary paperwork ready to avoid last-minute panic.

Tip #3: Better Mortgage Rates Come to Those Who Ask

Your current mortgage provider will rarely offer you the lowest rate possible. So if you want it, you must ask for it. Even then, they may hold back until you mention shopping around.

Knowing that better rates are the number one reason most people switch providers should entice your lender to make you a good offer. Even the smallest decimal point makes a significant difference in today’s unsettled economy.

Tip #4: Rate Hold

Your realtor can save you time and kilometres of legwork by using your credit report to find a lender list that offers the best rates.

Obtaining rate holds on these competing offers is critical. Rate holds prevent the interest rate from climbing for 120 days. You can further negotiate if interest rates go down during the lock-in period and if they’re lower come renewal time.

Tip #5: Switching Lenders Takes Time

If your current lender didn’t step up and offer you a better rate, hopefully you’ve looked into switching lenders early enough to allow adequate time to get things done before your mortgage renewal deadline.

In most cases, the application process takes over a week, so give yourself and your realtor enough time, or you may be stuck with your current lender at the higher rate for your next term.

Let’s Get You the Best Mortgage Renewal Rate Possible

Simply signing your current mortgage renewal without negotiating may be quick and easy, but it won’t get you the best rate.

I’m Joel Cooper. For over 15 years, I’ve helped countless people in Toronto and the GTA negotiate their mortgages. My client-centred approach keeps the focus on you and your needs. Through open communication and total transparency, we’ll accomplish meaningful results together.

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Hi, I’m Joel, a real estate professional based in Toronto.

My approach is simple—I put you first. I believe in open communication, total transparency, and meaningful results. I’ll guide you through the real estate process, market values, and always keep the focus on you—and your needs.