When to Renew Your Mortgage

February 20, 2019

As long as you owe a balance at the end of your mortgage term, you will be required to renew it. Each renewal offers the opportunity to identify your financial goals and adjust or re-mortgage to find one that works for you. Here are some of the most important steps to take when it’s time to renew your mortgage.

1. Plan ahead

Most lenders will let you start an early mortgage renewal process 120 days (about four months) before the end of your current term. Make a note of this day in your calendar and be prepared to get started on finding a new rate. If you’re not ready to sit down with a mortgage broker, you can start researching online to see the options available to you. The more information you have, the more likely it is you can find a good rate for your household. For more information on finding a better rate, take a look at 5 Tips for Your Mortgage Renewal.

2. Identify any changes in your financial goals

Whether the birth of a child or a raise in salary, financial changes and challenges happen in every household. Your mortgage renewal date is the perfect time to reflect on your goals and any changes that have occurred since signing on to your last mortgage rate. If you’re planning to move in the next five years, want access to equity, or are retiring soon, you should factor these goals into any conversation with lenders, banks, and mortgage brokers.

3. Make a list of your ‘mortgage musts’

In tandem with any changes in your financial goals, identify if your needs for a mortgage have changed in your last term. Some of the questions you should be asking yourself are:

  • Is there room in the budget to increase your monthly mortgage payments?
  • Are there any incoming lump sums, such as bonuses, inheritances, or asset liquidations that could be put towards your loan payments?
  • Is it possible that you could pay off your mortgage balance in the upcoming term?
  • Do you anticipate needing to borrow more money from your lender this term?

If the answer to any of these questions is yes, changes might be needed for your mortgage when you renew. Give special consideration to monthly prepayment options and penalties, as well as refinancing.

4. Be ready to renew within a month of the end of your term

Your current lender is required by law to send you a renewal notice, within a minimum of twenty-one days of the end of your term. This notice will have a renewal offer for the lender’s lowest posted rate,

which is guaranteed up until the maturity of your mortgage. However, your research should tell you whether or not this is the best rate available on the market. If your current lender’s offer doesn’t beat other options on the market, you have the right to negotiate a rate match.

5. Make your choice!

You’ve done your research, identified your financial goals and your ‘mortgage musts,’ and know what you’re looking for in a mortgage rate renewal. Whether you decide to stay with your current lender after a rate negotiation, or go through the process of switching renewals, it’s important to be decisive and to act in your best interest.

If you need help in identifying the best mortgage renewal option for you, get in touch with our team to get started today. Milka Lukacevic is your trusted and local Port Coquitlam mortgage broker.