Depending on the numbers, you have the opportunity to save cash with an early mortgage renewal. Each mortgage situation will be different based on many factors including the amount owing, the time left on the term, and your obligation to your lender, but there may be some benefits for you.
What are the benefits of early mortgage renewal?
Early renewal gives homeowners the chance to negotiate the terms of your mortgage. Even though you will be breaking the terms of your current mortgage, you can enter into a new term with a much more desirable rate. When you break a contract, you know there will be some penalties or consequences. The usual penalty is a prepayment penalty of three months at your current rate or at the IRD, also known as the Interest Rate Differential. You have the ability to weigh your potential savings with the Mortgage Penalty Calculator.
Tips that will save you money on your mortgage
- Start doing your research early – shop around for a better rate a few months before you are up for renewal or better, if you notice that the rate is low, see if renewing it at that time is a better option for you.
- Change lenders – if your current lender isn’t offering you anything beneficial, contact Northwood Mortgage™. We can help show you the available options to better help you understand the possibilities.
- Hire a mortgage broker – if you don’t want to be the negotiator, pay someone else to do it. They do all the hard work and provide you with the details.
- Negotiate other available options – the rate type (variable or fixed), amortization period and the payment schedule can all help to lower your costs.
We suggest that you re-examine your mortgage once in a while to make sure that you are in the best spot. Contact Northwood Mortgages to get our advice to help you make the best mortgage decision.
If you just want to trim down your mortgage payments each month, try one of these options:
- Increase your payment. Even increasing it by an extra $100 can help you to become mortgage free quicker.
- Try bi-weekly payments. Instead of the normal 12 payments per year, increase it to 26 payments per year.
- Round up. Say your monthly mortgage is $674, round up to $700, this will help you to pay down your mortgage quicker and you probably won’t notice the extra money as it leaves your bank account.
- If you end up with some extra funds, use them to do a lump sum payment.
- Be a well-informed homeowner, check interest rates and mortgage options year round. Make sure you are getting the best options for you.
For more information, contact our team directly.