It’s time to renew your mortgage! You may have received a slip in the mail from your lender saying it’s time to renew or maybe you’re proactive and starting early. Either way you probably have questions, so let’s get into it. Everything you need to know to renew your mortgage!

WHAT IS A MORTGAGE RENEWAL?

Every mortgage has a specific length of time associated with how long the loan is valid for, this is called the mortgage term. Your term can vary anywhere from a few months to over 5 years depending on your mortgage. 

When your term comes to an end you have 2 options. Pay your mortgage balance in full or renew your mortgage. Your lender is legally obligated to notify you 21 days before the end of your term to renew your mortgage. In most cases they will send you an offer for a renewal with a new interest rate and term. You can sign it, send it back and it can be that simple, but that isn’t always the most beneficial option for you. There’s lots to take into consideration.

WHAT SHOULD BE CONSIDERED WHEN RENEWING?

A renewal is an opportunity to review your mortgage needs and find a loan that is more suited to your current financial goals. Here’s some things to ask yourself while considering your mortgage renewal:

• Does your current budget give you room to increase your payments and therefore allow you to pay off your mortgage faster?
• Do you want to change your mortgage payment frequency?
• Do you have any extra payments you will be likely to make such as inheritances, bonuses, or lump sum gifts?
• Are you content with what your current lender is offering you and the service they provide?
• Do you have any other debts that you are going to want to consolidate or will you want to increase your mortgage amount?
• Is there a chance you will sell your house during your next mortgage term?

Once you’ve narrowed down what you’re looking for in your mortgage, a broker will be able to guide you towards mortgage renewal options that will work for your financial goals.

CAN MY MORTGAGE BE RENEWED WITH THE SAME LENDER?

You can definitely renew your mortgage with the same lender if you are happy with their offer and they suit your needs. 

When you receive your notice that it is time to renew your mortgage you may receive an offer of renewal with it, as mentioned earlier you can just sign that and send it back but you have the option to negotiate for a better interest rate. 

If you receive an offer for renewal your lender will likely give you the lowest rate they have available at that time and you are protected from any increase in interest rates for a period of time, but that doesn’t mean that is always the best rate available to you. Having a conversation with your current lender before renewing is suggested as it ensures you’re receiving the best possible arrangement. A mortgage broker will help you negotiate better rates with your current lender during your renewal if that is the option you chose.

CAN MY MORTGAGE BE RENEWED WITH A NEW LENDER?

Yes! You can renew your mortgage with a new lender. It’s recommended that you shop around and explore better rates or options that may be more suited to your needs. Your mortgage broker will be able to connect you with different lenders to see if their options fit your financial goals better. 

If you do find something better and make the jump to a new lender there is a couple things you will want to keep in mind:

• Your new lender may have different approval criteria than your previous lender. Which means you should be ready to submit a new mortgage application.
• There may be fees associated with changing lenders such as set up fees, appraisal fees and administrative fees.

Now we know the basics of a mortgage renewal so where do we start? Start by jotting down your financial goals and what you’re looking for in your renewal and then head over to a mortgage broker. With the support of a professional it will be easy to identify the loans that would work for you, the lenders you should be in contact with and you will have your renewal sooner than you imagined.