When your mortgage term comes to an end, you’ll be faced with the decision of whether to renew with your current lender or explore other options. Mortgage renewal presents an opportunity to reassess your financial situation and ensure your mortgage continues to align with your long-term goals. By implementing smart renewal strategies, you can potentially lower your interest rate, reduce overall costs, and increase the flexibility of your mortgage.
Here’s a guide to help you understand the best mortgage renewal strategies to get the most out of your mortgage.
One of the most important strategies for renewing your mortgage is to start early. Most lenders will send you a mortgage renewal notice 30 to 120 days before your mortgage term expires. However, waiting until the last minute to review your options can result in missed opportunities. By starting the process early, ideally 4-6 months before your term ends, you’ll have enough time to explore competitive rates and negotiate better terms.
Some strategies to consider during the early review include:
Get a Mortgage Professional: Working with a mortgage broker or advisor can provide you with insights into the best rates and terms available on the market. They can help you assess your options and recommend the most suitable lenders based on your financial profile.
Don’t assume that the rate and terms offered in your lender’s renewal notice are the best they can offer. One of the most effective mortgage renewal strategies is to negotiate with your current lender.
Consider Bundled Services: Some lenders offer bundled financial services, such as a discounted interest rate if you also open a savings or investment account with them. Explore these options to see if bundling can offer you financial benefits.
If your current lender is unwilling to offer competitive rates or terms, switching lenders might be your best strategy. While it can be more effort to switch, many borrowers save thousands over the term of their mortgage by switching to a lender that offers better rates or more favorable conditions.
When exploring new lenders, consider the following:
Amortization Periods: A new lender may offer you a longer amortization period, which can lower your monthly payments. However, be mindful that extending your amortization increases the overall interest paid over the life of the mortgage.
In some cases, refinancing your mortgage instead of renewing it can be a smarter strategy. Refinancing allows you to renegotiate the terms of your mortgage before the renewal period, potentially unlocking lower interest rates or consolidating other debts.
Debt Consolidation: Refinancing allows you to consolidate other debts, such as credit card or car loans, into your mortgage. This can simplify your payments and lower your overall interest costs.
Your financial goals may have changed since you first took out your mortgage, and your renewal is the perfect opportunity to realign your mortgage with your current circumstances.
Fixed vs. Variable Rates: Reconsider your preference for fixed or variable rates based on the current economic environment. Fixed rates offer stability, while variable rates could save you money if interest rates remain low.
Your mortgage renewal is a critical financial decision that can impact your finances for years to come. By starting early, negotiating with your lender, exploring other lending options, and potentially refinancing, you can maximize the benefits of your renewal. Whether you’re looking to lower your monthly payments, secure a better interest rate, or align your mortgage with your long-term goals, the strategies outlined above will help you make the most of this opportunity.
Ready to take the next step toward securing your mortgage? Reach out to XLG Mortgage Group today for a consultation. Our experts are available to answer your questions, discuss your financial goals, and help you find the mortgage product that best suits your needs.
+1 905-206-0090
+ 1 833-932-0012
info@xlgmortgagegroup.com
5250 Solar Drive, Unit # 208,
Mississauga Ontario, L4W 5M8
207-460 Hespler Road,
Cambridge, ON, N1R 0E3