When is the best time to renew my mortgage? It’s important that you start your mortgage renewal process early, at around 120 days before the maturity date of your current mortgage term. This is an ideal time to start your mortgage renewal process without the risk of your current lender imposing any kind of prepayment penalty because of breaking your mortgage term early. Starting early will also give you enough time to conduct your own research online and obtain as much information as possible before approaching any lender or mortgage broker. This will give you some leverage during the negotiations. Are there any costs involved when changing lenders?
You may incur several costs when changing lenders, including:
- An appraisal fee may be necessary to confirm the value of your mortgage property
- New lender setup fees, such as registration, discharge, transfer and/or assignment fees from your current lender
- A fee to cover the removal of any collateral charge on your mortgage from the current mortgage and subsequent registration of the new one (this will require you to either clear the debt or transfer all loan agreements that you secured using the collateral charge to the new lender)
- Other administration fees
It’s a good idea to ask your new mortgage lender whether they will pay for some or all the costs incurred during the switch.
Do I need a new mortgage loan insurance premium when switching lenders?
Yes. There are some instances when you may be required to pay a new mortgage loan insurance premium when switching lenders, such as:
- When your loan amount increases
- When you extend the amortization period
That said, you should inform your new lender if you have mortgage loan insurance on your existing loan to avoid paying the premiums twice. Simply ask for the certificate number from your current lender. Consider asking for a copy of the insurance certificate when getting your mortgage contract.
You will be required to sign the registration documents obtained with your mortgage contract, usually with the assistance of your lawyer or notary.