Planning Ahead to Get the Best Terms on Renewal!
Lisa Manwaring • February 3, 2021
If your mortgage term is almost up for renewal, there’s a good chance you’ll be pleasantly surprised with the low-interest rates available on the market today. While the pandemic has caused a lot of economic uncertainty, the result has been very low interest rates. In fact, the Government of Canada has indicated that rates will most likely stay low until 2023.
So if your mortgage is up for renewal in the next 6 months, here’s what you should do.
Start now. Yep, right now.
Getting ahead of your renewal is one of the most important things you can do. This will ensure that you don’t get busy, forget about the deadline, and have to make a rush decision. Or worse yet, your mortgage won't renew into a product you didn’t choose for yourself. You’ll want to weigh your options and make the best choice for you. This can take time. So start now.
One of the benefits of reviewing your renewal with an independent mortgage professional is saving hours of research. We deal with mortgage financing daily; our job is to keep up with all the lenders and their products and provide you with professional advice.
Please connect with me to discuss your renewal. I’d be more than happy to outline all your options.
Don’t sign your lender’s renewal offer.
If you’ve already received a renewal letter from your current lender, the last thing you want to do is just select the term with the lowest rate, sign it, and send it back. You have more options than this.
Renewal documents will showcase rates and products that are good for the lender, not necessarily for you. Mortgage lenders are in the business of making money, and as close to half of people sign their initial renewal offer without negotiating a better rate, lenders don’t feel they have to put their best offer forward. In fact, they make more money by doing the exact opposite.
Just because your current lender was the best choice when you got your last mortgage doesn't mean they're still the best choice now. Make sure to consider all your options, not just the options in front of you. Let’s talk.
Don’t get stuck on the rate.
Modern consumerism has us conditioned to believe that the lowest price is always the best. And although this might be the case when buying stuff at the thrift store, it certainly isn’t when considering mortgage financing. Interest rate is only one thing you should consider when renewing your mortgage.
Your goal should be to assess the quality of your next term by how much it lowers your overall cost of borrowing. Life is full of changes; you’ll want to ensure the features of your mortgage, such as term length, mortgage type, penalties, portability, and prepayment privileges, all line up with your goals. The lowest rate mortgage doesn’t always come with the most flexible terms. And sometimes, it makes sense to take a higher rate for better terms. Professional advice will help a lot as you make your decision.
So there you have it. If your mortgage is up for renewal anytime in the next six months, please contact me directly. Let's work together to secure the best mortgage for you.
RECENT POSTS
Worried About Your Mortgage Renewal? You’re Not Alone If your mortgage renewal is coming up soon, you're likely feeling a bit of financial pressure—and you’re not the only one. A recent survey shows that over half of Canadian homeowners believe their upcoming mortgage renewal could impact their current living situation. With interest rates still higher than what many borrowers locked in before 2022, 45% of those renewing in the next 12 months expect their monthly payments to increase. Even though the Bank of Canada has held its key overnight rate steady at 2.75%, borrowing costs remain elevated compared to the low-rate years we saw earlier in the decade. And that’s changing how Canadians think about their finances. Changing Plans and Tightening Budgets Among those worried about their renewal, 73% say they’re already cutting back on discretionary spending—things like eating out, entertainment, or travel—to brace for higher mortgage payments. For many, it goes deeper than just trimming the budget. Nearly one in four surveyed homeowners said they’re rethinking their entire financial strategy. Some are pressing pause on home renovations (43%), while others are considering downsizing or relocating to a more affordable area (29%). A smaller group (15%) is even open to major lifestyle changes, like moving in with roommates or relocating to a new neighbourhood altogether. Fixed-Rate Mortgages on the Rise In this climate, most homeowners looking to renew are leaning toward fixed-rate mortgages, with 75% preferring the stability of predictable payments. For those facing uncertainty, locking in a rate for the next few years can offer peace of mind—even if it means paying a little more in the short term. First-Time Buyers Are Feeling It Too It’s not just current homeowners feeling the pinch. A separate survey found that more than half of Canadians planning to buy a home are cutting back on non-essential spending to save for their down payment or other buying costs. About 31% are even considering tapping into savings or investment accounts like TFSAs, RRSPs, or first-time home savings accounts to make their purchase possible. What This Means for You Whether you’re preparing to renew or purchase for the first time, this environment calls for smart, strategic planning. You’re not alone in feeling uncertain—but with the right guidance, you can navigate these changes confidently. Have questions about your upcoming renewal or wondering what type of mortgage is right for today’s market? Let’s connect. We're here to help you make informed, confident decisions about your home financing.
Although it’s ideal to have your mortgage paid off by the time you retire, that isn’t always possible in today’s economy. The cost of living is considerably higher than it has ever been, and as a result, many Canadians are putting off retirement, hoping to make just a bit more money to add to that nest egg. So if you find yourself in the position where you’re considering your mortgage options into retirement, you’ve come to the right place. The advantage of working with an independent mortgage professional instead of a single bank is choice. When you work with an independent mortgage professional, you won’t be limited to an individual institution’s products; rather, you will have access to considerably more options. Here are some options available to older Canadians as they plan for mortgage financing through their retirement. Standard Mortgage Financing If you’ve got a steady income, decent credit, and equity in your home, there is no reason you shouldn’t qualify for standard mortgage financing, which usually comes at the lowest interest rates and best terms. Some lenders use pension and retirement income to support your mortgage application even if you’ve already retired. Reverse Mortgage Financing A reverse mortgage allows Canadian homeowners 55 years and older to borrow money from their homes with no proof of income, no credit check, and no health questions. A reverse mortgage is a fabulous mortgage solution that has helped thousands of older Canadians enhance their lifestyle. Home Equity Line of Credit (HELOC) A line of credit secured to the equity you have in your home is an excellent tool to allow you to access money when you need it but not pay interest if you don’t need it. Many older Canadians like the idea of rolling all their expenses and income into one account. Private Financing If you happen to be in a bit of a tight spot, you have a plan but need a financial solution; private financing might be the answer. Indeed not the first choice for many because of the higher interest rates. However, private financing can provide you with options where a traditional bank can’t. If you have any questions about securing mortgage financing for your retirement, please connect anytime. It would be a pleasure to work with you and walk you through all your options.
