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Mortgage Renewal

Mortgage Renewal


Mortgage renewal provides homeowners with the option to either stay with their current lender or choose another entity that provides them with a more suitable rate and term. This is the ideal time to re-examine your needs and find a mortgage that is best suited for your current needs and future goals.

According to our Northwood Mortgage™ renewal brokers, the best time to renew your mortgage is 4 months (120 days) before the current term ends. This will ensure that you don’t incur a prepayment fee or other penalties imposed by many lenders in the region.

Mortgage Renewal – Things You Should Know

If you have qualified for a mortgage before, then it means that you and your lender made a contract outlining your plan to make the loan repayments over a specific period of time, which is referred to as the mortgage term.

If you can pay the balance in full within the agreed time – which can range from several months to five years or more – you can renew your mortgage at the end of the current term.

If your mortgage contract is with a bank or any other federally regulated financial institutions, you will be automatically provided with a renewal statement at least three weeks before your current term expires. This is a legal requirement. If your lender doesn’t plan on renewing your mortgage, they’re also obligated to notify you at this time at the latest. The lender can use an appropriate method of communicating with you, such as electronic statements or paper statements sent via mail, to your liking.

The mortgage renewal statement should include the following information:

  • The remaining principal or balance at the date of renewal
  • The interest rate
  • The term
  • The payment frequency
  • Any fees or charges that apply

The renewal statement typically arrives at the same time as the mortgage renewal contract. The lender indicates a renewal for the posted rate that applies for a minimum of 30 days until the end of your term, to protect you from any potential increase in rates during this period.

Outline Your Mortgage Needs to Save Your Money

It’s important that you consult a mortgage renewal broker well in advance for assistance in finding and determining the best mortgage renewal options for your current situation.

Here are some questions to ask yourself when searching for the right mortgage:

  • Would you like to change the payment frequency?
  • Can you afford to increase your payments to enjoy lower interest rates and pay off your mortgage sooner?
  • Would you like to consolidate your debts that have higher interest rates to pay a higher mortgage amount?
  • Are you in a position to make additional payments?
  • Do you plan on obtaining optional life, disability, critical illness, or employment insurance?
  • Are you satisfied with the level of service provided by your current lender?

Don’t wait until your lender sends the renewal letter for you to start shopping around for better mortgage options. Start the process a few months before your term ends, and carefully consider all your options.

Visit your current lender to try and negotiate a better interest rate. If you plan to switch your mortgage to a different lender, keep in mind that the new lender may not necessarily use the same criteria as your original lender to determine your qualifications for a mortgage. Your new lender has to approve your application to successfully switch your mortgage plan.

Unless you take timely action, your mortgage renewal will happen automatically without having the chance to review the interest rate, terms, and conditions.

  • 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.

Why Choose Northwood Mortgage?

At mortgage renewal time, you may find your needs have changed. Perhaps this is the right time to tap some of your home equity for a renovation project? Or maybe you’re considering a cottage or vacation property, or want to use some of your equity for other long-term investments.

Take a look at your other debts; many Canadian homeowners have taken advantage of historically low rates and rolled all their other higher-interest debts into their mortgage at renewal

Mortgage renewal is an important moment of opportunity, to not only get new rates that allow you to save money, but also restructure your finances according to your goals.

Just make sure that you:

  • Don’t let your renewal date creep up on you
  • Know what you want
  • Meet with a broker in advance

Having multiple lenders compete for your mortgage renewal is a great way to ensure you get the best rate for your situation. We have access to over 50 lending institutions, including major banks, credit unions, trusts and other national and regional lenders, which means we can put significant negotiating power behind finding the best mortgage to fit your specific situation.

Provide us with the maturity date of your mortgage, and let us contact you four months prior to your renewal to get the ball rolling. There is no obligation.


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