5 Year Fixed 3.74%

5 Year Variable 3.15%

Switch or Renew?

Date Posted: January 5, 2018

It is extremely common for Canadians to simply sign the first offer from their existing mortgage lender at maturity without researching whether there are better options out there. Options that could potentially save them thousands of dollars of interest.

The new B20 guidelines, now in effect as of January 1st, 2018, may impact homeowners’ ability to switch lenders for some current mortgage holders. With the new requirements focusing on qualifying a large portion of mortgage borrowers at the benchmark rate or 2% above the contract rate (whichever is higher) some consumers may not have the ability to re-qualify for their mortgage and therefore will be required to simply renew their mortgage with their current lender.

Although this thought can be startling, don’t let it impact your decision to speak with your Mortgage Broker in the months leading up to your maturity date. Working with a mortgage professional can help understand the new changes and your current position.

Here are three things to keep in mind before you sign the first renewal offer you get.

The first rate isn’t always the best rate

Banks and other financial institutions usually start by offering you a rate other than their best rate. They sometimes offer their discounted rates to “preferred” customers. It is in the best interest of the customer to shop around. Our professional team of Mortgage Agents and Brokers work with over 30 financial institutions, which results in these lenders offering us the best competitive rates in the market in order to win our business. This often results in our clients obtaining a much lower rate upon renewal.

 Bank or Broker?

We work with most major banks, along with many other monoline financial institutions. Given the new regulations, each mortgage scenario is different and therefore all renewals are different. Your existing lender will likely send you a renewal notice several months prior to your maturity date. Working with a mortgage professional ensures that the rate and product you choose will be the best fit for your new term.

Check the terms before you sign

The lowest rate may not be the best rate, therefore you should always have a professional explain and read over the terms of your mortgage to you. Ensure you have a mortgage product that allows you to pre-pay your mortgage. It is also important for you to clearly understand how your mortgage penalty is calculated.  

Don’t put aside your mortgage renewal until the last minute. It is recommended that you begin shopping for a mortgage four months prior to your renewal. Contact us today and let us secure a rate for you!