When your mortgage term is coming to a close, most banks will send a Mortgage Renewal notice in the mail approximately one to two months prior to the end of the term. On this notice, banks will always offer you a high rate and assume that you will sign on with them for another term. They typically only offer you their posted rate with very little or no discount.

CMHC statistics show that over 60% of all Canadians accept the first rate their bank offers. They will stay with their existing mortgage lender because they believe it is too time consuming to shop around for a better rate. Or, they may believe the offer from their existing bank is the best deal available. This is not true!

Bank Policy

Traditional the major banks policy is to, at best, discount the posted rate by 0.10 to 0.50 percent. Our experience has shown that on average, most banks offer their renewing clients a discount of .25% off their advertised rates. If the client does manage to negotiate a better rate, it's usually a maximum ceiling discount of .50%. This is normally the maximum the branch allows the mortgage representative to discount any mortgage product. There may be some special cases that are given for clients who have many investments held within the bank.

When a mortgage comes up for renewal many people overlook three significant opportunities to save money.

1. They wait for their bank to notify them that their mortgage has matured. Therefore they are pushed to make a fast decision and accept the banks first offer. If you find that you waited until the last minute, you can actually ask your bank to move your mortgage to an open mortgage so you have time to decide on the best product.

2. They don't negotiate a discounted rate. As mentioned, the bank will always start by offering a higher rate. You have the right to ask for a better rate, no matter who the lender is.

3.They don't research the market to see what other lenders are offering. The Canadian mortgage market has become very competitive with many different products available. Banks will compete for your business! Talk to a mortgage broker and have them find you the best rate.

Transferring a Mortgage

A huge misconception among homeowners is that switching your mortgage between lenders will incur penalties and fees. The truth is, it is absolutely FREE! The major banks know that most homeowners don't know or understand transferring a mortgage is free and they certainly don't want you to know.

If you simply switch your mortgage to a new lender, you will not be subject to any fees or payout penalties if you are switching at renewal time. If your mortgage is in the middle of a term, there may be a penalty to switch. However, we have found that paying the penalty in many cases to change institutions to either get a lower rate or a better mortgage product can save consumers thousands of dollars.

Once you are qualified, your current mortgage balance and the remaining amortization period are transferred to your new lender with your new interest rate in place.

You should start thinking about switching your mortgage between 90 and 120 days before your mortgage renewal date. This not only gives you ample time to complete the process, but also protects you against any interest rate fluctuations that may occur prior to your renewal. If you get pre-approved with a new lender 4 months before renewal and interest rates start to rise, you will always be guaranteed the lower rate.

How We Can Help

We work for you, not the bank! Our brokers offer you the expertise and resources so you can take advantage of the competitive mortgage market. We deal with over 30 lenders across Canada to find you the best possible mortgage to fit your needs. We will save you time and money by negotiating a better rate on your behalf at no cost to you! Our services are absolutely FREE!

We assist you in gathering all information that the lender requires. We strive to make your Mortgage Renewal a smooth transition. Unlike the big banks, we work hard to earn your business and to keep you coming back! We guarantee to offer you the best discounted rate offered by any of our many lenders without having to play the  "major bank" negotiation game. We guarantee you the best rate on the first offer.

Getting Started

The next step in the Mortgage Renewal process is to obtain a pre-approval from a bank or lender. A pre-approval is simply a rate hold, typically from 90-120 days. This allows you to get all your financing setup prior to the end of your current mortgage term. A mortgage broker will help you acquire the pre-approval so you are confident you have the best product possible.

 What terms and payment options should you choose? 

• Short-term risk and variable 
• Long-term 
• Split-term 
• Prepayment options 
• Payment changes 
• Payment frequency 

Common Mortgage Categories 
Fixed-rate: 6 month, 1, 2 and 3 year (open, closed and closed-convertible) 4, 5, 7 and 10 year closed 

Variable-rate: 3, 4 and 5 year (open, closed, closed-convertible)

Split-term: Combination of all possible terms (6 month through 10 years) 

Self-directed RRSP: A specialty mortgage rate – term optional – within CMHC guidelines. Invest your own RRSP funds into all or part of your home mortgage. 

What terms and payment options should you choose? 
It all depends on what you want. Iwill assess your personal situation and needs to find the best mortgage for you at the best rate. 

Short-term and variable 
If rates are low and stable, and/or you are prepared to take a risk, you can generally pay a lower rate with a short-term mortgage and an overall lower interest rate with a variable rate mortgage. You simply roll over your term every 6 months, or float your rate against prime, with the option of locking into a longer term at a later date. This is not for everyone; we can help you make an informative decision whether this option is appropriate for your situation. 

Long-term
Any term 3 years or longer is considered "long term" in today's economy. By locking in you will avoid exposure to rate increases. You'll have the comfort of knowing exactly what your payments will be and you’ll be able to manage your budget accordingly. 

Split-term
A mortgage which allows you to minimize – or hedge – your interest rate risk by splitting your mortgage into segments. For example: A $150,000 mortgage could be split into 3 different portions of $50,000.  One in a variable, one in a line of credit and one in a fixed rate, allowing you the flexibility to choose different terms and options within your mortgage.

Prepayment Options 
Many lenders allow you to make a lump sum payment – usually 10% to 20% of the original principal balance. In addition, many mortgage products now include a "double-up and skip-a-payment" feature. This lets you "bank" extra mortgage payments for a rainy day, at which time you can "skip" them if you need to. Ask me to advise you on your options today! 

Payment Changes 
Many mortgages now allow the amortization to be adjusted by increasing the payment on closed terms by 10% to 20% per year, once annually. 

Payment Frequency 
Most mortgages now come with the option to pay your mortgage at a frequency that matches your cash flow – weekly, bi-weekly or semi-monthly or monthly. The added benefit of the "accelerated" weekly and bi-weekly payments is that by dividing a regular monthly payment into two or four respectively, and deducting it at the new interval, an extra payment a year is made directly against principal. 

Take advantage of my renewal registry! Register now and we will guarantee you the best rate 120 days prior to your renewal. You can register up to four years in advance - just fill out the form below. 
 

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